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Australia: Shares flat as financials offset gains in CSL and Wesfarmers; NZ unchanged
[BENGALURU] Australian shares were unchanged on Wednesday as sharp falls in Commonwealth Bank of Australia and Insurance Australia Group were offset by gains in biotherapeutics firm CSL and conglomerate Wesfarmers after they reported strong earnings.
The S&P/ASX 200 index rose 2.0 points to 6,301.00 by 0200 GMT. The benchmark rose 0.8 per cent on Tuesday.
Top lender Commonwealth Bank of Australia led a sell-off in financial stocks on Wednesday as it tumbled 3.4 per cent, on track for its worst day in more than six months.
CBA shares were trading ex-dividend, with executives of its pension unit giving evidence at a powerful inquiry into financial-sector wrongdoing.
Meanwhile, a slump in insurance stocks also drove the fall in financials.
Shares of Insurance Australia Group Ltd slumped as much as 8.5 per cent to a near four-month low, pushing the financial benchmark lower.
The country's second-largest insurer reported a 1 per cent rise in annual net profit from continuing operations and said it would return A$592 million to shareholders through capital management initiatives.
"That's the trend at the moment, everyone is doing capital management, the buy-backs and dividends, no one is actually coming out and saying we are investing in the business to grow the business," said Mathan Somasundaram, Blue Ocean Equities market portfolio strategist.
Mr Somasundaram added "that sector is obviously going to have some issues going forward, we've got the Royal Commission playing out in the insurance super (superannuation funds)."
Insurer Suncorp Group fell 2.9 per cent to a two-week low as the stock began trading ex-dividend.
Energy stocks also traded lower, hurt by a one-two punch of lower oil prices and a dip in Woodside Petroleum Ltd, the biggest listed oil and gas explorer, after it flagged higher costs in full-year fiscal 2018.
Woodside Petroleum reported a 6 per cent rise in net profit and raised its 2018 production outlook. However, the forecast was clouded by higher production costs and investment expenditure.
A fall in base metal prices, coupled with lower Chinese iron ore futures drove materials stocks lower.
Diversified miner South32 Ltd fell 3.4 per cent to a near two-week low, while Alumina Ltd dipped 0.9 per cent.
But drugmaker CSL Ltd and Wesfarmers Ltd rose to record highs, offsetting the losses on the benchmark.
Shares of CSL were trading 2.6 per cent higher, after it reported a near 30 per cent rise in annual net profit on Wednesday, thanks to strong sales in the United States.
Wesfarmers Ltd surged as much as 4.2 per cent after profit from continuing operations, excluding one-offs, jumped 5.2 per cent to A$2.90 billion.
Across the Tasman Sea, New Zealand's benchmark S&P/NZX 50 index slid 3.33 points to 8,968.61.
Dairy firm a2 Milk Company Ltd dropped 1.8 per cent, accounting for most of the losses.