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Australia shares falter on financials, retailers; NZ up
May 26, 2016 / 3:02 AM / 2 years ago

Australia shares falter on financials, retailers; NZ up

SYDNEY/WELLINGTON, May 26 (Reuters) - Australian shares slipped on Thursday despite a firmer start to the session, shrugging off overnight gains on Wall Street as weakness in financial and consumer staples sectors offset a rally in miners.

The S&P/ASX 200 index dipped 9.21 points, or 0.17 percent, to 5,363.3 by 0245 GMT. On Wednesday, the benchmark bounced off a two-week low to end 1.5 percent higher.

The index, which started on a positive note, tested a key resistance level of 5,400 in early trade but soon lost steam. The benchmark has breached that level only once before since August 2015.

“It has been a volatile and a wild ride,” OptionsXpress analyst Ben Le Brun said.

“There is no clear catalyst to get us above and beyond the key 5,400 level. Earnings growth has been sadly lacking.”

Wesfarmers, the owner of Coles supermarket, was among the biggest loser on the index, down about 3 percent with Morgan Stanley expecting the retailer to cut dividends. Australia’s No.1 company by sales on Wednesday said it will write down $1.6 billion, while flagging its worst yearly profit in two decades.

Rival Woolworths, which has already been struggling to boost sales, was down about 1 percent.

In financials, insurer Suncorp was the biggest loser, down nearly 4 percent after two broker downgrades, traders said. Insurance Australia Group was down 1.6 percent while wealth manager AMP slipped 1.6 percent.

The big banks were mixed with Commonwealth Bank and National Australia Bank down 0.11 and 0.76 percent respectively. ANZ rose 0.83 percent while Westpac was up 0.4 percent.

Miners were in the black with BHP Billiton and Rio Tinto up 2.3 percent and 0.6 percent respectively. Fortescue climbed more than 2 percent.

Wall Street rose robustly for a second straight session on Wednesday, helped by higher oil prices and investors becoming more comfortable with the prospect of an interest rate hike as early as next month.

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New Zealand’s benchmark S&P/NZX 50 index rose 0.4 percent or 26.77 points to 6,934.81.

New Zealand unveiled its annual budget on Thursday, expecting to post a NZ$719 million ($483 million) surplus in the year to June 2017. ($1 = 1.4883 New Zealand dollars) (Reporting by Swati Pandey; Editing by Richard Pullin)

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