Australia: Westpac Banking weighs on shares; New Zealand inches up

[BENGALURU] Australian shares fell on Thursday, led by financial stocks, with Westpac Banking Corp falling more than 1 per cent as its board faced intense scrutiny over a money-laundering scandal at the annual shareholder meeting.

The S&P/ASX 200 index was down 0.6 per cent, or 39.70 points, at 6,712.90, as of 0104 GMT. The benchmark closed 0.7 per cent firmer on Wednesday.

Westpac, the country's oldest and second-largest bank, said it would implement additional transaction monitoring as it seeks to hold back an avalanche of outrage over a scandal that includes accusations of enabling child exploitation payments.

The bombshell lawsuit, as the country was still digesting a damaging financial misconduct inquiry, has sent Westpac's shares down 9 per cent in the three weeks since it was announced, wiping about A$8.6 billion (S$8 billion) off its market value.

The financial sub-index declined 0.8 per cent, with the rest of the "Big Four" banks down between 0.7 per cent and 1.2 per cent.

"They (investors) don't like to be reminded of the headwinds that banks face," said Henry Jennings, senior analyst and portfolio manager, Marcustoday.

"It just reminds people that banking is not what it used to be in terms of the compliance and regulatory framework which now needs to be adhered to, as it is more expensive and does weigh on profits."

Investors were cautious despite the US Federal Reserve signalling that borrowing costs will not change anytime soon, as the economic outlook of the world's top economy remains "favourable".

Energy units retreated 0.6 per cent as a surprise climb in US crude inventories hit oil prices and raised concerns over global demand outlook.

Sector heavyweight Woodside Petroleum fell 0.3 per cent, while peer Oil Search dropped 0.8 per cent.

Oil and gas explorer FAR plunged up to 28 per cent to its lowest in more than five years as it announced the completion of a A$146 million placement to fund development of a Senegal oil field project.

Tech stocks declined 1.5 per cent, with software developers Xero and WiseTech Global falling 1.9 per cent and 3.1 per cent, respectively.

Lynas Corp, the world's only major rare earths producer outside China, jumped 9.3 per cent and was the top gainer in the ASX benchmark after Reuters reported that the US Army plans to fund construction of rare earths processing facilities in the United States.

Across the Tasman Sea, New Zealand's benchmark S&P/NZX 50 index added 0.1 per cent, or 8.91 points, to 11,300.87.

Sky Network Television Ltd, the best performer on the bourse, gained 4.1 per cent.

REUTERS