Australia, New Zealand: Shares retreat as ECB holds rates steady

[BENGALURU] Australian shares fell on Friday after three straight sessions of gains, with declines led by tech stocks and financials as investors registered disappointment with European Central Bank putting off an interest rate cut until probably September.

The S&P/ASX 200 index fell 0.4 per cent or 23.9 points to 6,794.10 by 0155 GMT. The benchmark rose 0.6 per cent on Thursday and was set to gain 1.2 per cent for the week.

"Equity markets responded to the ECB very much in a "buy the rumour sell the fact" way," ANZ said in a note.

The financials sub-index lost 0.6 per cent, with the "Big Four" banks retreating between 0.3 per cent and 0.8 per cent, but the sub-index was still set to rise 1.8 per cent for the week.

National Australia Bank lost 0.6 per cent and Australia and New Zealand Banking Group lost 0.7 per cent.

The focus is now squarely on what the US Federal Reserve decides next week at a policy committee meeting, with expectations running high for a cut in rates.

Lower US interest rates will help lenders borrow US denominated notes at cheaper rates, and alleviate some of the pressure on margins following two rate cuts by the Reserve Bank of Australia earlier this year.

Tech stocks dropped 1.6 per cent, in line with Wall Street peers that fell after disappointing results from chipmakers, and social media giant Facebook warned that new rules and product changes aimed at protecting user privacy would slow its revenue growth into next year.

Computershare fell 0.8 per cent and Australia-listed Xero lost 1.8 per cent.

Energy firms gained 0.4 per cent, as oil prices rose overnight supported by rising tensions between the West and Iran.

Woodside Petroleum gained 0.3 per cent and peer Oil Search advanced 0.7 per cent.

Mining stocks were marginally higher, after falling 2 per cent in the previous session. The sub-index was on track for a 1 per cent weekly decline.

Global miners BHP Group and Rio Tinto added 0.3 per cent and 1.2 per cent, respectively.

New Zealand's benchmark S&P/NZX 50 index fell 0.78 per cent or 84.75 points to 10,811.76.

Auckland International Airport slipped 2 per cent and a2 Milk Company lost 1.8 per cent.

REUTERS