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Australia shares end lower hurt by financials; NZ gains
[BENGALURU] Australian shares ended lower on Monday, as disappointing earnings from the country's biggest bank weighed on financials, although losses were offset by gains in healthcare and gold stocks.
The S&P/ASX 200 index closed down 0.2 per cent, or 13.30 points, at 6,297.60. The benchmark rose 0.3 per cent on Friday.
Financial stocks closed down 1.8 per cent at a near four-week low after Commonwealth Bank of Australia (CBA) took a hit to its third-quarter cash profit and announced a further A$714 million in provisions to compensate customers for being overcharged or wrongly billed for services not provided.
CBA and other top banks have spent millions in compensation to wronged customers, as they attempt to mend their reputation after the damaging Royal Commission enquiry into systemic misconduct in the sector.
CBA fell 2.5 per cent, while National Australia Bank lost 2 per cent. Westpac Banking Corp edged slightly lower.
"This update was consistent with trends seen across the other banks, with revenue pressure, elevated costs and deteriorating asset quality... with significant headwinds facing the banks, it is difficult to see much upside," UBS said in a note.
May is also usually a weak month for Australia's financial sector as top banks trade ex-dividend during the period, said Mathan Somasundaram, Market Portfolio Strategist at Blue Ocean Equities.
Australia and New Zealand Banking Group fell 3.9 per cent while Macquarie Group shed 3.6 per cent, as shares of both banks traded ex-dividend.
NAB and Westpac are set to trade ex-dividend on May 14 and 16, respectively.
An apparent deadlock in trade negotiations between the United States and China, with Washington demanding promises of concrete changes to Chinese law while Beijing remained defiant, kept the market in a state of uncertainty.
Investors took cover in healthcare stocks, a defensive sector in times of market volatility, with index heavyweight CSL ending 1.4 per cent higher.
Gold miners also rose as investors snapped up safe haven assets, with top miner Newcrest Mining Ltd gaining 0.5 per cent.
Across the Tasman Sea, New Zealand's benchmark S&P/NZX 50 index closed up 0.3 per cent or 27.46 points at 10,126.83.
Utilities provider Trustpower rose 2.9 per cent while telecom service provider Spark New Zealand gained 1.8 per cent.