Australia: Shares slip on banks, investors eye China trade data

[SYDNEY] Australian shares dropped 0.5 per cent on Monday to their lowest point since early February, squeezed by uncertainty over the outlook for banks as investors exercised caution ahead of key trade data from China, Australia's largest export market.

The S&P/ASX 200 index lost 28.5 points to 5,159.8 by 0111 GMT, recovering from session lows of 5,122.0. The benchmark lost 2.1 per cent on Friday.

Ahead of numbers on China's September trade balance, banks led the way down, with analysts at Macquarie Bank saying the outlook has become less certain as investors consider the impact of interest rate increases in the United States. Commonwealth Bank of Australia lost 0.9 per cent, while Westpac Banking Corp declined 0.8 per cent.

Broader industry concerns persist. The country's 'Big Four' banks lost an average of 7.7 per cent each in September, compared to a broader market loss of 5.9 percent, on speculation that an independent inquiry, due in November, may recommend limits to the use of public funds in the event of a banking crisis.

Other high yielding stocks were moderately lower. Telecom firm Telstra Corporation Ltd slipped 0.3 per cent, while consumer retail staple Wesfarmers Ltd shed 1.9 per cent to 13-month lows of A$40.06.

Elsewhere, Atlas Iron Ltd jumped 2 per cent, and Fortescue Metals Group Ltd leaped 5.4 per cent as iron ore futures in China and Singapore rose.

Qantas Airways Ltd dropped 2 per cent to match an August low of A$1.32 after saying as of September 17, foreign investors already held a 47.8 per cent stake in Qantas, close to the 49 per cent allowed under the Qantas Sales Act and indicating little further buying by non-Australian parties.

Meanwhile mining and infrastructure firm WDS tumbled 67 per cent to all-time lows of A$0.27 after issuing a shock profit warning, saying it now expects net profit after tax to be in the range of just A$1 million to A$3 million.

New Zealand's benchmark NZX50 index slipped 50.6 points, or 0.9 per cent, to a three-week low of 5,174.463 in early trade, extending losses from late last week as the market tracked losses in global shares.

Xero fell 6 per cent to plumb a one-year low of NZ$17.75 (US$13.89) on rising concerns that the accounting software developer may report a bigger fall in profits for the year ended September than the NZ$25 million forecast by the company.

Refining New Zealand fell 2.6 percent to NZ$1.68 as investors booked profits on the company's rally to a three-month high after it averted a strike last week. - Reuters