Nov 20 (Reuters) - Australian shares dipped on Monday, weighed down by banking stocks that accounted for nearly half of the losses after Wall Street closed lower on uncertainties surrounding Republicans’ ability to pass U.S. tax reforms.
While investors have been optimistic that the tax overhaul plan will boost corporate earnings and further fuel the U.S. markets’ long bull run, the tax debate has now shifted to the Senate, where the plan has faced resistance and the Republican majority is slimmer.
The S&P/ASX 200 index was down 0.2 percent or 14.354 points to 5,942.900 by 0110 GMT. The benchmark rose 0.2 percent on Friday.
“We have had negative leads from U.S. markets combined with the fact that Asia-Pacific markets have generally performed very well in the last six weeks,” said Michael McCarthy, chief market strategist at CMC Markets.
“So, it looks like we are seeing some corrective action. This is largely due to the fact that investors are looking to lock down the gains they made lately.”
Financial stocks were the biggest drag, with heavyweights Australia and New Zealand Banking Group Ltd and Commonwealth Bank of Australia accounting for most of the losses.
“I think the market has had a good run and people are taking a bit off the table,” said Chris Weston, institutional lender at IG Markets.
The technology sector was also in the red, with Carsales.com Ltd falling as much as 1.8 percent before paring some of the losses.
The online auto classifieds company said it had signed a memorandum of understanding with SK Holdings Co Ltd to buy the remaining 50.1 percent stake in South Korean joint venture Encar.com.
Bucking the trend, CSL Ltd rose 0.7 percent to its highest since Nov. 13, while Santos Ltd rose 2.2 percent.
Meanwhile, the minutes from the Reserve Bank of Australia’s (RBA) Nov. 7 meeting are to be released on Tuesday.
“Markets will pay close attention to the RBA, though, at the moment its stand is very well flagged to the market. The RBA wants to raise rates but will wait for economic indicators such as inflation and growth. The common perception is that at this stage, rates are on hold,” said Michael McCarthy
New Zealand’s benchmark S&P/NZX 50 index rose 0.25 percent or 20.020 points to 8,082.000.
Health care and consumer staples accounted for most of the gains, with Fisher & Paykel Healthcare Corporation Ltd rising to a record high.
Dairy company a2 Milk Company Ltd rose as much as 2.3 percent to its highest since Nov. 6, on track for fourth consecutive session of gains.
Reporting by Aditya Soni in Bengaluru; Editing by Kim Coghill