Banks, commodity stocks weigh on Australia shares; NZ falls

[BENGALURU] Banks and commodity stocks led declines in Australian shares on Wednesday against a backdrop of broader losses in global equities, pressured by concerns of slowing growth.

World oil prices slumped on weakening demand and supply glut concerns. Sluggish corporate earnings as well as Sino-US trade tensions have kept investors away from riskier assets over the past couple of months.

Australia's S&P/ASX 200 index slipped for a second straight session, closing 1.7 per cent down at 5,732.8. The benchmark closed 1.8 per cent lower on Tuesday.

Bank stocks closed nearly 2 per cent lower as they continue to bear the brunt of explosive findings from a Royal Commission inquiry into financial sector misconduct.

The 'Big Four' banks lost between 2.3 per cent and 3 per cent for the day.

"There is a broad based sell-off in the banking sector, and the concern is that this is being done with a decent volume today...there is fear in the air," said James McGlew, executive director of corporate stockbroking at Argonaut.

McGlew added that with certain findings from the Royal Commission yet to be handed down, the banking sector is still in the spotlight.

"Clydesdale (Bank) today is a shining light in a banking sector that is otherwise down significantly," said McGlew.

UK-based Clydesdale Bank Plc was spun off from National Australia Bank in 2016. Australia-listed shares of Clydesdale's holding company CYBG PCL rose 3.4 per cent, its biggest intra-day per centage gain in over 5 months.

Metals and mining stocks also dragged the market to close nearly 2.4 per cent lower, hurt by copper and iron ore prices.

Global miners BHP Billiton and Rio Tinto fell 2.3 per cent and 2.6 per cent, respectively.

Energy stocks fell 2.6 per cent, with sector heavyweight Woodside Petroleum Ltd losing 2.5 per cent and Santos Ltd declining 5 per cent.

Bucking the trend, telco Telstra Corporation Ltd rose 0.7 per cent, thanks to its attractive dividend, said McGlew.

New Zealand's benchmark S&P/NZX 50 index fell nearly 0.4 per cent to finish the session at 8,827.74.

Express package and mail service provider Freightways Ltd led losses, down 6.2 per cent. A2 Milk Ltd fell 2.8 per cent.

REUTERS