Australia: Shares end lower as CBA leads banks' selloff

[BENGALURU] Australian shares closed lower on Wednesday (Nov 17) as selling in top lender Commonwealth Bank of Australia (CBA), due to its warning of a margin-hit, pulled the heavily weighted financial sector down.

The S&P/ASX 200 index ended 0.68 per cent down at 7,369.9.

The country's largest lender CBA dropped up to 8.4 per cent, its biggest fall in nearly 2 years, after warning of a considerable hit to margins from a low interest-rate environment and mortgage competition. Its first-quarter cash profit, however, was up by a fifth.

The financials sub-index fell 2.74 per cent as worries about shrinking profits weighed, with rest of the "Big Four" banks losing between 1.8 per cent and 2.5 per cent.

"Banks are heavy negatives today and CBA results along with previous Westpac results will weigh on the financial sector in the short term," said Mathan Somasundaram, chief executive officer at Deep Data Analytics.

"Indications of economic weakening are apparent in the market when you put into context the stimulus pushed into it, and the economy is going to see lower growth from here. So, markets are worried."

Heavyweight miners declined 1.03 per cent as a rising greenback pressured dollar-denominated commodities, and as iron ore dropped for a fourth straight session.

Miners BHP Group, Rio Tinto and Fortescue Metals sagged between 1 per cent and 1.9 per cent.

Seed technology and crop protection maker Nufarm plunged as much as 8.6 per cent to fall most in 6 months after the company said global logistics and supply chain challenges will continue to pressure its margins.

New Zealand's benchmark S&P/NZX 50 index fell 0.51 per cent to end at 12,837.4.

REUTERS