Australia: Shares dip on financials; New Zealand edges up

[BENGALURU] Australian shares ticked down on Friday, led by losses in financials which fell on the prospects of a weaker local currency and persistently low interest rates.

The S&P/ASX 200 index fell 0.5 per cent or 30.30 points to 6,068.0 by 0247 GMT. The benchmark added 0.8 per cent on Thursday and was on track to gain 1.9 per cent for the week.

The Reserve Bank of Australia sees faster economic growth this year and next but doubts inflation will reach the mid-point of its 2 per cent to 3 per cent target band until 2020, a strong signal rates are set to stay at record lows for a good while yet.

"Banks have very low growth so they are seeing selling pressure as well as the global guys selling the banks on the weak currency outlook," said Mathan Somasundaram, Market Portfolio Strategist at Blue Ocean Equities.

Financials led the losses on the main index, falling 0.5 per cent, on track to snap five sessions of gains.

Top lender Commonwealth Bank of Australia fell 1.4 per cent and was the biggest drag on the benchmark, while Westpac Banking Corp dipped 1 per cent.

Bucking the trend, Macquarie Group rose as much as 3 per cent to a record high.

The country's biggest investment bank posted a record annual profit and dividend as reduced profits from its financial markets business were more than offset by higher earnings in its asset management and banking arms.

AMP Ltd, the country's largest wealth manager, traded flat after refuting assertions by lawyers assisting an inquiry into banking misconduct that it had committed a criminal offence when it provided an altered report to the regulator.

AMP has seen around A$2.2 billion (S$2.2 billion) wiped off its market capitalisation over the past three weeks in the wake of revelations at the Royal Commission enquiry into financial misconduct.

Materials also accumulated losses, hurt by a fall in iron ore and aluminium prices.

South32 Ltd dropped 3.1 per cent, while Rio Tinto Ltd fell 0.2 per cent.

Shares of commercial explosives maker Orica Ltd rose 3.2 per cent to their highest in six months after it clarified that media reports regarding an A$115 mln provision for environmental cleanup was part of a A$300 mln charge it announced on March 1.

Losses on the benchmark were capped by gains in consumer staples, which rose 0.4 per cent to a new record high.

"The market is willing to park money in the supermarkets because of a lack of choice, not because of any growth improvement," said Mr Somasundaram.

Australia-listed shares of a2 Milk Company Ltd rose as much as 4.9 per cent to a more than three-week high, while grocery giant Woolworths Group Ltd traded 0.2 per cent higher.

New Zealand's benchmark S&P/NZX 50 index ticked up 0.1 per cent or 4.80 points to 8,551.64, on track to register a weekly gain of 2.2 per cent.

Consumer staples accounted for most of the gains, with the a2 Milk Company Ltd rising 2.3 per cent to its highest since April 11.

REUTERS