You are here
Australian shares inch lower as financial stocks drag; NZ flat
[BENGALURU] Australian shares reversed course and edged lower on Tuesday, as gains in mining and energy stocks were offset by losses in financials at the fag end of the session after the sector came under further political scrutiny.
The S&P/ASX 200 index ended down 0.1 per cent, or 5.40 points, at 6,174.80. The benchmark declined 0.4 per cent on Monday.
"The Australian Treasurer Josh Frydenberg came out in the last few hours and said that his government would be walking away from banning trailing commissions for brokers, financial planners and financial advisers," said Kyle Rodda, market analyst at IG Markets.
"Potentially it's being seen now that this will put banks back into the spotlight as a political football. It relates to the view that the (opposition) labour party will take a hard line on the financials sector, as a whole."
The financial sector has been under the scanner ever since revelations of widespread misconduct led to a year-long public inquiry.
The federal government reversed a key recommendation of the inquiry and will no longer ban trailing commissions - a fee paid by investment management firms to financial advisors, the Australian Financial Review reported on Tuesday.
Financials saw a turnaround in the last hour of trade, with the index falling 0.4 per cent at close.
Lender Westpac Banking Corp lost 0.6 per cent, while Australia and New Zealand Banking Group Ltd slipped 1.2 per cent.
Meanwhile, resource-based stocks gained on encouraging comments from the Sino-US trade front.
US and China have set the next steps in "working arrangements", Chinese state news agency Xinhua said, as top officials from the two sides discussed key issues in their trade talks over a telephone call.
Markets await a resolution to the long-drawn tariff dispute which has taken a toll on the economic growth of China - Australia's largest importer of raw materials.
"There is potential optimism still on the trade deal that is playing through," said Mathan Somasundaram, market portfolio strategist at Blue Ocean Equities.
Mining stocks gained 0.3 per cent helped by higher iron ore and base metal prices. Global miners BHP Group Ltd and Rio Tinto Ltd added 1.1 per cent and 1.3 per cent, respectively. Iron ore miner Fortescue Metals Group Ltd rose 2.7 per cent.
Meanwhile, energy stocks gained 0.7 per cent buoyed by a rise in oil prices.
Index heavyweight Woodside Petroleum Ltd rose 0.8 per cent, while peer Santos Ltd was 1.9 per cent higher.
Across the Tasman Sea, New Zealand's benchmark S&P/NZX 50 index ended nearly flat at 9,397.25.
Auckland International Airport Ltd added 0.8 per cent, while dairy products maker a2 Milk Company Ltd was marginally lower.