Australia shares lower after Italy rejects reform in referendum; NZ down

[BENGALURU] Australian shares fell on Monday, dragged down by financials, while investors assessed the impact on markets impact from Italy's vote against constitutional reform.

Prime Minister Matteo Renzi said he would resign after conceding defeat in a referendum on constitutional reform which exit polls and early projections showed he would lose by a wide margin.

Investors and Europe's politicians fear victory for the opposition 'No' camp could cause political instability and renewed turmoil for Italy's banks, pushing the euro zone towards a fresh crisis.

The S&P/ASX 200 index fell 0.9 per cent, or 47 points, to 5,397 by 0036 GMT. The benchmark lost 1.16 per cent last week.

"While our markets had been anticipating better chances of a 'No' vote than a 'Yes' vote, the Italian referendum gave investors a reason for a sell-off after a strong run-up from the Trump election," said James McGlew, executive director of corporate stock-broking at Argonaut. "The situation in Italy reinforces just how splintered the EU is at the moment. The risk there is on currencies."

The Reserve Bank of Australia holds its monthly policy meeting on Tuesday. A Reuters poll showed investors expect the central bank to keep its cash rate unchanged.

On Wall Street, the S&P 500 financial index ended down 1 per cent on Friday as the worst-performing sector among 11 major S&P sectors. The index has risen 13.1 per cent since the Nov 8 presidential election.

Australia's benchmark financial index. which has gained nearly 10 per cent since Nov 8, was down over 1.2 per cent in thin trade, the biggest drag on the overall index. All of the "Big Four" banks dropped by more than 1 per cent.

Energy stocks also showed some losses, with the benchmark index falling 1.3 per cent, led by Woodside Petroleum which slid nearly 2 per cent.

At the other end, DUET Group soared as much as 20 per cent to top an eight-year high after Hong Kong's Cheung Kong Infrastructure made a A$7.3 billion (S$7.7 billion) approach for the company.

DUET's gains rippled across the utilities sector, with Spark Infrastructure Group climbing 4.6 per cent to a 1-month high.

Gold stocks gains with Newcrest Mining rising 0.4 per cent.

New Zealand's benchmark S&P/NZX 50 index slipped 0.3 per cent, or 19.58 points to 6,885.27, weighed down by healthcare and consumer stocks.

Fisher & Paykel Healthcare Corp fell as much as 3 per cent, while Skycity Entertainment Group Ltd slid 3.3 per cent.

REUTERS