You are here

Australia: Shares close lower on banks after new capital requirements

doc76563vimk5l1ggybgjdr_doc6uc0xtup2kj16swpull2.jpg
Banks pushed Aussie shares to a one-week low on Tuesday after the financial regulator slapped new capital requirements on the sector, while miners gained on upbeat outlook for iron ore prices.

[SYDNEY] Banks pushed Aussie shares to a one-week low on Tuesday after the financial regulator slapped new capital requirements on the sector, while miners gained on upbeat outlook for iron ore prices.

The S&P/ASX 200 index ticked lower 0.1 per cent, or 6.5 points, at 6,665.7, its lowest close since July 2. The benchmark lost 1.2 per cent on Monday.

Financials stocks bore the brunt of losses after Australian Prudential Regulation Authority said it will raise capital requirements for banks by 3 percentage points of risk-weighted assets.

The increase was less than originally proposed, but is still likely to put pressure on lenders whose margins are expected to take a hit after the country's central bank cut its cash rate earlier this month.

"Banks will get no respite from the final rules, as more expensive capital instruments replace senior unsecured issuance," Fitch Ratings said in a note.

Your feedback is important to us

Tell us what you think. Email us at btuserfeedback@sph.com.sg

The "Big Four" banks lost between 0.3 per cent-0.7 per cent.

Investors also awaited US Federal Reserve Chairman Jerome Powell's testimony on Wednesday and Thursday for cues on the near-term outlook for monetary policy.

New Zealand's benchmark S&P/NZX 50 index dipped 0.6 per cent or 67.87 points to finish the session at 10,538.11.

REUTERS

BT is now on Telegram!

For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes