Australia: Shares slump after ANZ misses; NZ at near 1-week low

[BENGALURU] Australian shares slumped on Thursday, hit by a drop in Australia and New Zealand Banking Group Ltd after its annual net profit came in slightly lower than estimates, with weakness in miners also dragging on the index.

ANZ, the country's No. 3 lender, said its statutory net profit rose 12 per cent to A$6.41 billion (S$6.7 billion), just below the A$6.87 billion average estimate of nine analysts surveyed by Thomson Reuters I/B/E/S.

ANZ shares slipped as much as 2.4 per cent after the results, the biggest daily percentage drop in nearly 11 weeks, and its lowest price in more than two weeks.

"The result adds to our conviction that ANZ is missing the margin sweet spot in Australian banking, while institutional margins and revenues remain under pressure," Morgan Stanley said in a note.

Other "Big Four" banks followed suit, falling between 0.5 per cent and 0.6 per cent. The financial index posted its biggest daily drop in more than three weeks.

On Wednesday, the Australian dollar sank to its lowest since mid-July after a surprisingly subdued domestic inflation reading further diminished the chance of an increase in interest rates anytime soon, stifling banks' ability to raise their margins.

The S&P/ASX 200 index fell 15.6 points, or 0.3 per cent, to 5,890 at 0115 GMT. The benchmark rose 0.1 per cent on Wednesday.

"There are negative leads from global markets, and we have also heard from a number of companies today - their quarterly reports and their annual general meetings," said Michael McCarthy, chief market strategist at CMC Markets.

"Their outlook statements and results have had a slightly negative impact (on the market)." Miners steepened the slide on the index, with BHP Billiton falling to its lowest in nearly a week on soft iron ore prices.

Fortescue Metals Group Ltd, the world's fourth-largest producer of iron ore, logged its biggest single-day percentage fall in nearly six weeks with a 3.8 per cent drop, after reporting only a slight rise in iron ore shipments.

Qantas Airways plunged 7.2 per cent to a three-week low early on after saying it expected slower revenue growth, but the shares later trimmed losses to trade down 1.9 per cent.

New Zealand's benchmark S&P/NZX 50 index fell 23.74 points, or 0.3 per cent, to 8,098.93 at 0115 GMT.

Construction firm Fletcher Building slid 2.1 per cent, weighing most on the index, closely followed by Spark New Zealand Ltd. The telco fell 1.2 per cent to its lowest in almost two weeks.

Statistics New Zealand said the country experienced a monthly trade deficit of NZ$1.143 billion in September, with the annual deficit at NZ$2.91 billion.

REUTERS