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Australia shares fall on weaker financials, global cautious; NZ also down
August 21, 2017 / 2:55 AM / 3 months ago

Australia shares fall on weaker financials, global cautious; NZ also down

Aug 21 (Reuters) - Australian shares fell on Monday, tracking weakness on Wall Street amid increasing doubts about the Trump administration’s ability to deliver its economic agenda.

The S&P/ASX 200 index was down 0.4 percent, or 24.2 points, at 5,722.90, by 0240 GMT.

Trump has alienated many senior members of his own Republican Party, some corporate leaders and U.S. allies with his recent comments after violence at a Virginia rally organized by neo-Nazis and white supremacists.

In a surprise move, Trump on Friday fired his chief strategist Steve Bannon, known as an economic nationalist and an advocate of “America First” policies.

“We’re seeing a little bit of caution overall in the market this morning, which probably reflects the fact that we have seen an increase in volatility in US markets over the past 10 days or so” said Ric Spooner, chief market strategist at CMC Markets.

Financial stocks were the biggest drag on the index, with the “Big Four” banks losing in the range of 0.6 percent to 1.3 percent with Commonwealth Bank of Australia posting the second biggest loss on the main index.

“The banks are possibly just encountering a bit of profit taking after a rally following a reasonably good set of results by NAB and ANZ,” said Spooner.

CBA, however, has found itself in troubled waters in the past two weeks over damaging publicity about a money-laundering lawsuit which could expose CBA to the largest fine in Australian corporate history, amounting to billions of dollars.

The healthcare sector was dragged down by a 1.4 percent and 1.9 percent fall in shares of CSL Ltd and Sonic Healthcare Ltd respectively.

The metals and mining index clocked minor gains, helped by World no. 4 iron ore miner Fortescue Metals Group which gained as much as 6.7 percent after the company reported a 113 percent rise in full-year net profit

However, the biggest drag on the index was BlueScope Steel Ltd, which tumbled 22.6 percent after its full-year underlying earnings missed estimates and it said it expected net profit for first half of FY2018 to be lower than second half of FY2017.

Major miners BHP Billiton and Rio Tinto gained as much as 1 percent and 1.6 percent, respectively, supported by firm commodity prices.

China’s iron ore futures climbed nearly 7 percent on Friday and oil prices continued to extend gains from last week

New Zealand’s benchmark S&P/NZX 50 index was down 0.1 percent, or 6.29 points.

Spark New Zealand Ltd was down 0.8 percent while Meridian Energy Ltd fell as much as 1.4 percent.

Reporting by Chandini Monnappa; Additional reporting by Chris Thomas in Bengaluru; Editing by Kim Coghill

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