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Australia shares lose steam as financials and real estate stocks weigh
October 23, 2017 / 6:43 AM / a month ago

Australia shares lose steam as financials and real estate stocks weigh

(Updates to close)

Oct 23 (Reuters) - Australian shares snapped their biggest winning streak in almost three years on Monday, ending lower as property stocks weighed and financials stocks surrendered early gains following their recent run higher.

The S&P/ASX 200 index rose as much as 0.3 percent during the day before ending 0.2 percent, or 12.988 points, lower at 5,894. The benchmark index rose 0.2 percent on Friday, making eight straight days of gains, its best winning streak since January 2015.

“At some stage, we are going to be at the mercy of traders looking to take a bit off the table and I think that is where we are right now,” said Chris Weston, an institutional dealer with IG Markets.

Early gains in the index were supported by financial stocks, which took their cues from a record close on Wall Street in the previous session, after the U.S. Senate approved a 2018 budget blueprint, lifting hopes that President Donald Trump’s tax-cut plan may move forward.

“We have discounted a lot of good news, but nothing has really changed. This is just merely profit-taking, the macro backdrop is still very much inducive of risk appetite,” Weston said.

The sell-off was led by real estate stocks, which accounted for more than a quarter of losses in the index, with industrial property developer Goodman Group Pty Ltd falling 2.3 percent to its lowest in over two weeks, and shopping centre developer Westfield Corp dropping 1.9 percent.

The benchmark index of financial stocks, which gained as much as 0.4 percent during the day, ended marginally lower, with the “Big Four” banks closing between 0.1 percent to 0.5 percent.

The financials index also snapped eight consecutive session of gains.

Australia and New Zealand Banking Group Ltd ended 0.2 percent lower after it signed a last-minute deal to settle a case brought by the country’s securities regulator accusing it of manipulating the bank bill swap rate.

Among material stocks, mining giant BHP Billiton Ltd closed 0.7 percent lower, while South32 Ltd ended down 0.8 percent.

Gold miners continued to be a drag on the benchmark index, with Evolution Mining ending 1.7 percent lower. Gold prices took a hit as optimism surrounding U.S. tax reform boosted riskier assets and dragged gold prices.

Telecom stocks led the gainers, with Telstra Corp closing 1.7 percent up after Australian Competition & Consumer Commission decided not to declare domestic mobile roaming.

New Zealand markets were closed for a holiday on account of Labour Day. (Reporting by Sandhya Sampath in Bengaluru; Editing by Sam Holmes)

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