Australia, New Zealand: Shares lower as Wall St, central banks keep investors cautious

[BENGALURU] Australian shares sagged in light trade on Monday, after weak earnings weighed on Wall Street and kept investors cautious ahead of a busy week of central bank meetings.

Wall Street took a hit at the end of last week after major technology firms' earnings reports missed estimates, which led to sharp declines in other stocks.

"The market is moving on the negative impact that we have seen on markets on Friday night when US markets turned sour," said Michael McCarthy, Chief market strategist at CMC Markets.

The S&P/ASX 200 index fell 0.4 per cent, or 26.9 points to 6,273.3 by 0200 GMT. The benchmark climbed 0.9 per cent on Friday to a 10-year closing high.

The benchmark's move to 6,300 level last week and anticipation ahead of local corporate earnings have left investors waiting for the next catalyst for direction.

"These factors are working together to give a cautious start to the week with many investors locking down some strong gains ahead of those key events that could change the outlook," Mr McCarthy said.

General weakness among financial stocks were enough to weigh on the main board, with the sector index down 0.5 per cent.

Commonwealth Bank of Australia led the declines among the 'Big Four', down 0.7 per cent.

Global events will also keep investors cautious, with the Bank of Japan likely to test markets amid talk the central bank could tweak its massive asset-buying, while the Federal Reserve is expected to reaffirm outlook for further gradual rate rises.

Wealth manager AMP jumped more than 5 per cent, regaining almost all of its losses from Friday when it flagged its financial impact from the Royal Commission inquiry into financial sector misconduct.

In the mining sector, South32 and Rio Tinto were the biggest drags, falling 1.7 per cent and 1 per cent, respectively.

Global miner BHP edged lower with a labour strike at its Escondida mine in Chile almost inevitable. The stock rallied over 2 per cent on Friday on news of its US shale assets sale to BP.

After several meetings last week, workers at the world's largest copper mine rejected the company's final contract offer and agreed to vote on whether to strike.

New Zealand's benchmark S&P/NZX 50 index dropped 27.78 points, or 0.3 per cent, to 8,968.38.

a2 Milk Company lost as much as 2 per cent and was the biggest drag.

REUTERS