By Hanna Paul
July 21 (Reuters) – Bank stocks lost steam and pulled
Australian shares lower on Friday as investors booked profits
after two sessions of strong gains.
The S&P/ASX 200 index was down 26.55 points, or 0.5
percent, at 5,734.9 by 0300 GMT. The benchmark rose 0.5 percent
A gauge of financial stocks dipped over 0.7 percent.
while three of the ‘Big Four’ banks lost between 0.3 to 0.6
percent. The country’s biggest bank by market value,
Commonwealth Bank of Australia, was flat.
“The banks have had two very strong days, with 3 percent
gains in the sector,” said Michael McCarthy, chief market
strategist at CMC Markets.
Financials had rallied as the banks, especially the Big
Four, declared that they were comfortable with new capital rules
unveiled by the Australian Prudential Regulation Authority
As these very strong gains are “combined with the high
Australian dollar, international investors are locking in some
of those recent gains by selling today,” McCarthy said.
The Aussie dollar touched a two-year peak this week as
encouraging jobs data fuelled hopes of a rate hike by the
central bank, but it slipped on Friday.
Mining heavy weights BHP Billiton and South32
slipped nearly 1.9 percent and 2.5 percent,
respectively, pulling materials stocks into the red.
Activist shareholder Elliott Management expressed concerns
over BHP’s proposal to enter the over-supplied
Fortescue Metals Group dipped as much as 3.5
percent. An Australian court ruled against the company in claims
made by indigenous Aboriginal groups over land in Pilbara
Primary Health Care Ltd bounced back up over a
percent after dropping as much as 5 percent to its lowest in 2
months after downgrading its annual profit outlook to the lower
end of its guidance.
New Zealand’s benchmark S&P/NZX 50 index fell 4.57
points, or 0.06 percent, to 7,667.87 by 0301 GMT.
The index was little changed as gains in healthcare and
utility stocks outweighed losses in the materials sector.
Fletcher Building was among the biggest percentage
decliners while Fisher and Paykel Healthcare was among
(Reporting by Hanna Paul; Additional Reporting by Urvashi
Goenka; Editing by Kim Coghill)