Australia: Shares tepid as Westpac Banking drags; New Zealand dips

[BENGALURU] Australian shares were subdued on Tuesday ahead of a central bank policy meeting, while losses in Westpac Banking Corp pressured the overall market after the lender flagged weak trading conditions following a lower annual profit.

The S&P/ASX 200 index was trading at 6690.3, as of 0149 GMT. The benchmark ended 0.3 per cent higher on Monday.

Shares in Westpac Banking, the country's second-largest lender, slipped to their lowest since May 17, and was one of the biggest drags in the ASX 200 index.

The lender on Monday had reported a 15 per cent slide in its full-year cash earnings and cut its dividend for the first time in a decade. It also announced completion of an A$2 billion share placement on Tuesday as it seeks to beef up capital levels amid tougher regulatory requirements.

"Westpac has taken some of the gloss off today but that wasn't unexpected considering the deep discount the placement was done at," Henry Jennings, senior analyst and portfolio manager at Marcustoday Financial Newsletter.

Among the other "Big Four" banks, Commonwealth Bank of Australia advanced 1 per cent, while National Australia Bank , which is due to report results on Thursday, added 1.2 per cent.

"We're obviously expecting to see the same sorts of pressures that we have seen in ANZ and Westpac to play on NAB," Jennnings said, adding that a dividend cut was a high possibility.

Markets were also focussed on the Reserve Bank of Australia's policy review due later in the day. Analysts in a Reuters poll expect the central bank to stand pat but cut at least once more early next year to revive inflation and a slowing economy.

Energy stocks advanced 0.8 per cent, with Woodside Petroleum, the country's biggest oil and gas explorer rising 1.2 per cent, while Oil Search added 0.8 per cent.

The energy sector was set for a third straight day of gains, helped by strength in oil prices on an improved outlook for crude demand after the United States and China signalled progress in trade negotiations.

Trade-sensitive mining stocks also lent support to the local benchmark, with the sub-index rising 0.2 per cent. Major players BHP Group and Rio Tinto added 1.2 per cent and 1.3 per cent, respectively.

Gold stocks dropped 2.5 per cent as increased optimism over a US-China trade deal capped gains for the safe-haven bullion. Newcrest Mining and St Barbara shed 1.8 per cent and 3.7 per cent, respectively.

Across the Tasman Sea, New Zealand's benchmark S&P/NZX 50 index fell 0.1 per cent, or 9.05 points, to 10,792.05.

Local shares of Westpac dipped 3.4 per cent.

Communications infrastructure services provider Chorus and electricity retailer Meridian Energy strengthened 1.4 per cent and 0.4 per cent, each.

REUTERS