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Australia: Shares lead lower by banking sector; New Zealand down
[BENGALURU] Australian shares slipped on Friday, pulled lower by heavweight banking shares after disappointing financial results from Australia and New Zealand Banking Group.
The S&P/ASX 200 index fell 0.3 per cent or 20.9 points to 6,642.5 by 0013 GMT. The benchmark fell 0.4 per cent on Thursday.
ANZ fell 2.6 per cent to a more than two-month low and was the biggest loser among financials for a second session. Westpac Banking Corp was down nearly 2.2 per cent, while top lender Commonwealth Bank of Australia lost 1.6 per cent. National Australia Bank, which is set to report full-year results next Thursday, fell 1.3 per cent.
ANZ on Thursday reduced franking credits on its final dividend payout to 70 per cent as it reported second-half profits that missed market expectations. Franking credits allow shareholders to reduce or eliminate double taxation.
"It appears there is now investor consternation that the other major banks may also reduce their franking percentages," Morgans analyst Azib Khan said in a note.
However, Mr Khan said he considered that fear to be largely unjustified given the other major banks derive a greater proportion of earnings from Australia and had healthier surplus franking credit balances.
Investment bank Macquarie Group slipped 1.8 per cent after it revealed a slump in traditional banking takings and forecast a weaker annual result on Friday, although it posted a record first half profit, driven by higher fees from its managed funds.
Elsewhere, concerns about a potential Sino-US trade deal getting off the ground continued to weigh on shares.
Mining stocks slipped, with global miners BHP Group and Rio Tinto Ltd falling 1.5 per cent and 1.2 per cent, respectively.
Safe-haven gold stocks were snapped up in the midst of the uncertainty, with Newcrest Mining tacking on 3.4 per cent while Northern Star Resources added 4 per cent.
Across the Tasman Sea, New Zealand's benchmark S&P/NZX 50 index fell 0.3 per cent or 33.52 points to 10,754.84.
Contact Energy fell 2.3 per cent, while dairy giant a2 Milk Company slipped 1 per cent.