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Australia shares fall on weaker financials, global cautious; NZ also down

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Australian shares fell on Monday, tracking weakness on Wall Street amid increasing doubts about the Trump administration's ability to deliver its economic agenda.

[BENGALURU] Australian shares fell on Monday, tracking weakness on Wall Street amid increasing doubts about the Trump administration's ability to deliver its economic agenda.

The S&P/ASX 200 index was down 0.4 per cent, or 24.2 points, at 5,722.90, by 0240 GMT.

Mr Trump has alienated many senior members of his own Republican Party, some corporate leaders and US allies with his recent comments after violence at a Virginia rally organised by neo-Nazis and white supremacists.

In a surprise move, Mr Trump on Friday fired his chief strategist Steve Bannon, known as an economic nationalist and an advocate of "America First" policies.

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"We're seeing a little bit of caution overall in the market this morning, which probably reflects the fact that we have seen an increase in volatility in US markets over the past 10 days or so" said Ric Spooner, chief market strategist at CMC Markets.

Financial stocks were the biggest drag on the index, with the "Big Four" banks losing in the range of 0.6 per cent to 1.3 per cent with Commonwealth Bank of Australia posting the second biggest loss on the main index. "The banks are possibly just encountering a bit of profit taking after a rally following a reasonably good set of results by NAB and ANZ," said Spooner.

CBA, however, has found itself in troubled waters in the past two weeks over damaging publicity about a money-laundering lawsuit which could expose CBA to the largest fine in Australian corporate history, amounting to billions of dollars.

The healthcare sector was dragged down by a 1.4 per cent and 1.9 per cent fall in shares of CSL Ltd and Sonic Healthcare Ltd respectively.

The metals and mining index clocked minor gains, helped by World no. 4 iron ore miner Fortescue Metals Group which gained as much as 6.7 per cent after the company reported a 113 per cent rise in full-year net profit However, the biggest drag on the index was BlueScope Steel Ltd, which tumbled 22.6 per cent after its full-year underlying earnings missed estimates and it said it expected net profit for first half of FY2018 to be lower than second half of FY2017.

Major miners BHP Billiton and Rio Tinto gained as much as 1 per cent and 1.6 per cent, respectively, supported by firm commodity prices.

China's iron ore futures climbed nearly 7 per cent on Friday and oil prices continued to extend gains from last week New Zealand's benchmark S&P/NZX 50 index was down 0.1 per cent, or 6.29 points.

Spark New Zealand Ltd was down 0.8 per cent while Meridian Energy Ltd fell as much as 1.4 per cent.

REUTERS

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