You are here

Australia shares slip on financials as CBA, ANZ weigh; NZ up

[BENGALURU] Australian shares slipped on Monday, as financial stocks plunged after the country's top lender, Commonwealth Bank of Australia, reported disappointing third-quarter results, while other top banks also traded ex-dividend.

The S&P/ASX 200 index had eased 0.3 per cent or 21.4 points to 6,289.5 by 0110 GMT. The benchmark rose 0.3 per cent on Friday.

Financial stocks plunged nearly 2 per cent after Commonwealth Bank of Australia took a hit to its third-quarter cash profit and announced a further A$714 million (S$680 million) in provisions to compensate customers for wrongdoing.

CBA and other top banks have spent millions in compensation to wronged customers, as they attempt to mend their reputation after the damaging Royal Commission enquiry into systemic misconduct in the sector.

sentifi.com

Market voices on:

CBA fell as much as 3.1 per cent, while National Australia Bank Ltd lost 1.3 per cent and Westpac Banking Corp shed 0.7 per cent.

"They've outperformed in the last couple of months, so its a bit of steam coming off in that context. CBA's provisions will also weigh on the others," Mathan Somasundaram, Market Portfolio Strategist at Blue Ocean Equities said.

He added that May was in general a weak month for Aussie financials as top banks trade ex-dividend during the period.

Australia and New Zealand Banking Group and Macquarie Group dropped 4.1 per cent each, as shares of both traded ex-dividend.

NAB and Westpac are set to trade ex-dividend on May 14 and 16, respectively.

Investors were left in a state of heightened uncertainty by the apparent deadlock in trade negotiations between the United States and China, with Washington demanding promises of concrete changes to Chinese law while Beijing remained defiant.

Energy stocks also slipped with Woodside Petroleum Ltd shedding 0.8 per cent.

Trepidation propped up healthcare stocks, a defensive sector in times of market volatility, with index heavyweight CSL Ltd rising as much as 1.3 per cent.

Across the Tasman Sea, New Zealand's benchmark S&P/NZX 50 index rose 0.3 per cent or 27.48 points to 10,126.85.

Dairy firm a2 Milk Company rose as much as 0.5 per cent, while Fonterra Shareholders' Fund put on 1.2 per cent.

REUTERS