You are here
Australia shares slide on bank funding concerns, NZ stocks fall
[SYDNEY] Australian shares fell on Wednesday as concerns over wholesale funding of the country's financial sector pushed the benchmark index to a near two-week low.
The S&P/ASX 200 index was down 0.92 per cent to 5,489.8 points at 0229 GMT, near the session trough of 5,481.7, the lowest since July 22. On Tuesday, the benchmark dropped 0.84 per cent.
New Zealand's benchmark S&P/NZX 50 index fell 0.39 per cent or 28.54 points to 7,300.66 points.
Analysts attributed Australia's decline to concerns over wholesale funding issues the financial sector appears to be facing.
After the central bank on Tuesday cut the country's key rate by 0.25 per cent, commercial banks passed less of that reduction to mortgage holders. The banks also raised term deposits, a move seen as attempting to raise capital without tapping the wholesale market.
"There is a lot of questioning about whether the banks have signalled to the market that they are getting to the point where net interest margins are becoming a concern," said Evan Lucas, market strategist, IG Markets.
Shares in National Australia Bank Ltd fell more than 2 per cent, while Australia and New Zealand Banking Group, Westpac Banking Corp and Commonwealth Bank of Australia shed more than 1.5 per cent.
Seven Group Holdings Ltd rose nearly 6 per cent after the company posted a better-than-expected 10 per cent fall in annual net profit, with rising commodity prices patching over problems in the media business.
Meanwhile, New Zealand shares were poised for a second consecutive decline.
Sky TV led losses, falling 2.2 per cent, while chicken producer Tegel lost 1.8 per cent.
New Zealand Oil & Gas fell 2.1 per cent after the company announced the resignation of its CEO.
CDL Investments New Zealand rose nearly 2 per cent after reporting higher first-half profit.
Millennium & Copthorne Hotels New Zealand Limited rose 8.3 per cent after the hotel operator posted strong half-year profits.