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Australia: Shares falter as financials weaken

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[SYDNEY] Australian shares sank on Thursday dragged down by financials such as Westpac Banking Corp, after it traded ex-dividend, despite an improvement in the country's jobless rate.

The S&P/ASX 200 index dropped 0.8 per cent, or 47.728 points to 5,738.3 at the close of trade. The benchmark fell to its lowest in nearly eight weeks in early trade. The bourse slipped 1.1 per cent on Wednesday.

All sectors were in the red with bank stocks accounting for more than half of the losses on the benchmark.

The country's second-biggest lender Westpac dived as much as 4.7 per cent to its lowest close in more than five months as it traded ex-dividend while the other banks in the "Big Four" fell between 0.2-0.9 per cent.

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The gloomy sentiment in the bourse was also prompted by a slump in Wall Street on mounting concerns over US President Donald Trump's ability to deliver on his tax, banking reforms and infrastructure spending policies, following reports of his interference with a federal investigation.

Global miner BHP Billiton joined the top losers in the bourse, falling 1.3 per cent, at one point. Activist investor Elliott Management said a meeting with BHP's chief executive this week was 'constructive'. The fund is urging the miner to make strategic changes.

Bucking the trend, Fairfax Media leapt 7 per cent to a more than six-year high, after the country's oldest newspaper publisher received a US$2.87 billion takeover bid from a second US private equity firm.

"A bidding war for Fairfax Media may have started as the media company received a new bid from global private equity firm, Hellman and Friedman," said Chris Conway, Head of trading and research at Australian Stock Report.

Australia's unemployment rate slipped to 5.7 per cent in April, the Australian Bureau of Statistics said, compared with analysts' expectations for a steady 5.9 per cent.

New Zealand's benchmark S&P/NZX 50 index dropped 0.7 per cent, or 50.74 points, to finish the session at 7,371.76. The index recorded its biggest one-day fall in two months despite reports of growing consumer confidence in the country in May.

Health care and telecom stocks were the biggest drags with telecom service provider Spark New Zealand, down 1.8 per cent, among the top decliners.