March 9 (Reuters) - Australian shares traded marginally lower on Thursday as gains in financials countered the heavy sell-off in resource stocks that dived on an overnight slump in oil prices.
The S&P/ASX 200 index was down 0.2 percent or 8.67 points to 5,751 by 0112 GMT.
Oil prices slid 5 percent to their lowest this year on Wednesday, as U.S. crude inventories surged much more than expected to a record high.
Meanwhile, a decline in metal prices on Wednesday further triggered the sell-off in materials, with big-cap copper and iron ore miners trading in the red.
The benchmark metal index dropped to its lowest in two months. BHP Billiton, which has significant oil exposure was the worst performer, losing as much as 4.8 percent, its lowest in three months. The stock was also trading ex-dividend. BHP’s peer Rio Tinto Ltd fell as much as 2.1 percent to hit a one-month low.
Energy shares also fuelled the losses, with oil major Woodside Petroleum dipping 1.8 percent and Santos Ltd shedding three percent. The benchmark energy index slid to its lowest in three months.
On the positive side, financials rose, with the “Big Four” banks gaining between 0.7 percent to 1.4 percent.
“You could sort of argue how expectations of an interest rate hike (U.S. interest rates) give them (banks) a little bit of benefit. A lot of investors push that one,” said Patersons Securities economist Tony Farnham.
Banks tend to benefit from rising interest rates and Federal Reserve Chair Janet Yellen recently indicated that the Fed was set to raise rates at its meeting on March 14-15 if employment and other economic data hold up.
Also lending some support to the Aussie index was consumer stocks. Betting company Tabcorp rose 2.8 percent, after it announced plans to sell a Queensland electronic gaming machine monitoring business to address competition concerns over its proposed takeover of rival Tatts Group. Tatts gained 3.3 percent.
New Zealand’s benchmark S&P/NZX 50 index fell 0.23 percent or 16.54 points to 7,161.68. Industrials and utilities were the major losers.
Shares of Air New Zealand dropped as much as 6.8 percent on trading ex-dividend.
Reporting by Anusha Ravindranath in Bengaluru; Additional reporting by Urvashi Goenka; Editing by Jacqueline Wong