May 9 Australian shares fell on Tuesday, hurt by
strong declines in the "Big Four" banks which said they were
working hard to cut costs to maintain earnings momentum as they
face challenges such as new government inquiry and a possible
The S&P/ASX 200 index slipped 19.093 points, or 0.3
percent, to 5,851.8 points by 0257 GMT.
In the first half of the financial year, the cash earnings
of Commonwealth Bank of Australia (CBA), Westpac
Banking Corp, National Australia Bank (NAB)
and Australia and New Zealand Banking Group (ANZ) rose
by an average of 6.2 percent on flat revenue, according to a
As revenue stagnates and the mortgage business struggles
with regulations designed to cool a red-hot housing market, the
banks' profit growth increasingly depends on cost-cutting and
There also has been political pressure for a far-reaching
inquiry into financial sector malpractice, with the government
saying it will look into competition in the financial system,
following a series of scandals in the banking
Sentiment was also affected by media speculation that the
government intends to impose a transactions tax on institutional
"By default, that (levy on lending) is going to drive up
interest rates because it is a cost of doing business. It is a
ghost tax. You are taxing the consumer without doing it
directly. You are going to tax the banks, which will then drive
up their cost of doing business," said Mathan Somasundaram,
Market Portfolio Strategist at Blue Ocean Equities.
The financial index slumped more than 2 percent to a
six-week low, with the "Big Four" banks falling by as much as
2.3 percent to 3.1 percent.
In other stocks, Ardent Leisure Group slid as much
as 8.8 percent to post its biggest intra-day percentage fall in
10 weeks after it said it expects its theme park division to
report a loss for the year ended June 30.
The declines were not broad-based, however, with eight out
10 sectors in the black.
Explosives and fertiliser maker Incitec Pivot Ltd
gained 3.7 percent after it reported an 11 percent rise in
half-year underlying profit on Tuesday as cost cuts offset weak
Crown Resorts was 1 percent firmer after the casino
group agreed to sell its remaining stake in Macau-focused Melco
Resorts and Entertainment Ltd for $1.16 billion as it
looks to pay down debt and focus on its Australian
New Zealand's benchmark S&P/NZX 50 index slipped 0.4
percent or 28.57 points to 7,397.89.
Healthcare, materials and industrials were the biggest drag
on the index.
Seafood company Sanford Ltd was among the biggest
percentage losers, falling 2.8 percent.
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(Reporting By Shashwat Pradhan in Bengaluru; Additional
reporting by Rushil Dutta; Editing by Eric Meijer)