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Australia: Financials drag shares to near 3-week lows; NZ down
[BENGALURU] Australian shares slid more than half a per cent on Tuesday as financials extended losses following a scathing interim Royal Commission report last week.
The S&P/ASX 200 index fell 0.6 per cent or 35.6 points to 6,136.70 by 0200 GMT, at a near three-week low. The benchmark closed 0.6 per cent lower on Monday.
Financial stocks fell over 1 per cent, albeit in light early trade, to the lowest in three-and-a-half months, and comes on the back of Friday's interim findings of a high-profit inquiry into the financial sector which has seen the index slide for five of the last six sessions.
National Australia Bank was the biggest drag among the country's 'Big Four' banks, falling over 1 per cent, while Westpac Banking Corp dropped 1 per cent.
However, Mathan Somasundaram, a Blue Ocean Equities market portfolio strategist, said the Royal Commission report was having a waning effect after the country's treasurer called on any new measures taken against the banks to not hurt the economy or lead to tighter lending.
But instead, he stated that "cost of borrowing is going up globally, and I think nearly 40 per cent of our banks' funding comes from overseas."
The Australian central bank is widely expected to stretch its record spell of steady rates when it holds its policy meeting in a few hours' time.
"So costs are going up, margins are shrinking. It's a tough place to make money. So the banks will struggle and there is always going to be regulatory concern hanging over them."
Energy stocks saw support from surging oil prices, which jumped to levels not seen since November 2014 as markets adjust to prospect of tighter supply once the US sanctions against Iran kick in next month.
Origin Energy rose 2.6 per cent.
Gold stocks slid 1 per cent with Cardinal Resources and St Barbara weighing, down 4.4 per cent and 1.9 per cent.
The mining sub-index was slightly lower as the country's key resource market, China, was closed for a week-long holiday.
New Zealand's benchmark S&P/NZX 50 index dipped 0.1 per cent or 13.11 points to 9,314.16.
A private think-tank survey showed that New Zealand business confidence sank to a nine-year low in the third quarter as concerns over government policy and labour costs dampened sentiment.
Index heavyweights Air New Zealand fell 1.3 per cent offseting gains by Fletcher Building, which rose 1.2 per cent.