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Australian shares fall on political uncertainty, NZ hits record intraday high

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[BENGALURU] Australian shares slipped on Wednesday, weighed by materials and financials, as political uncertainty hurt local stocks with Prime Minister Malcolm Turnbull rejecting seven Cabinet members' resignations as he seeks to quell a renewed leadership bid by a conservative challenger.

Mr Turnbull survived a leadership vote against former Home Affairs Minister Peter Dutton in a party-room vote on Tuesday.

The benchmark Australian stock index lost 1 per cent on Tuesday, with the narrow margin of Mr Turnbull's victory heightening speculation that his leadership days were numbered.

The Sydney Morning Herald said that Wednesday's falls in financial and real estate stocks may have been driven by "concerns that yesterday's leadership spill has handed the bank-and-property-market-unfriendly Labor opposition power come the next election".

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The benchmark S&P/ASX 200 index was down 0.5 per cent to 6,253.4 at 0200 GMT on Wednesday, hurt by financials and materials.

"The state of modern politics in Australia unfortunately is where the focus is internal rather than external politics...that's why the market fell out of bed yesterday and that's why it's down again today," said Greg McKenna, chief market strategist at AxiTrader.

Damian Rooney, director of equity sales at Argonaut, said the Australian market was also hit by news that Michael Cohen, US President Donald Trump's former lawyer,"has admitted some illegal contributions, his former campaign chairman (Paul Manafort) has been convicted... so I think that gave us a more negative tone than expected".

E-mini futures of the S&P 500 were trading 0.2 per cent lower after news of Cohen's admissions, reflecting concerns on the US political outlook.

Australian financial stocks were 1.1 per cent lower, with National Australia Bank down 1.3 per cent and Australia and New Zealand Banking Group Ltd 1.2 per cent weaker, on what Argonaut's Mr Rooney termed as "just a bit of profit taking".

BHP, the world's top miner, and its rival Rio Tinto Ltd were 1.7 per cent and 1.6 per cent lower, respectively. Iron ore futures traded in China, a key market, were 0.5 per cent weaker, after having lost 1.5 per cent on Tuesday.

On Wednesday, mobile network provider TPG Telecom confirmed deal talks with Vodafone Group PLC's Australian arm.

Shares of TPG jumped 14.6 per cent while those of Hutchison Telecommunications (Australia), a co-owner of the local Vodafone venture, zoomed 30 per cent.

News of Coca-Cola Amatil reporting a 12.8 per cent jump in interim profit and saying its was open to selling packaging unit SPC drove the stock up 4 per cent.

Scandal-plagued wealth manager AMP Ltd was down 2.2 per cent. It said on Wednesday that interim chief executive Mike Wilkins would be replaced by Francesco De Ferrari, who had been was Credit Suisse's chief executive for Southeast Asia and frontier markets.

"I guess it is positive to have someone with overseas experience...I think that should be a positive move to get such a perceived high calibre candidate on board," said Argonaut's Mr Rooney.

Across the Tasman Sea, New Zealand's benchmark S&P/NZX 50 index touched an all-time intraday high, carried up by consumer discretionary stocks.

It was trading up as much as 0.6 per cent to 9,169.490, after edging up 0.1 per cent on Tuesday.

Dairy giant a2 Milk Company Ltd helped buoy the benchmark by gaining as much as 7.6 per cent, its steepest gain since Feb. 22, on reporting full-year net profit which more than doubled, spurred by Chinese demand.

REUTERS