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July 18 (Reuters) – Australian shares faltered on Tuesday as
banks were sold off and Rio Tinto stocks slipped after the
company cut its 2017 iron ore guidance.
The S&P/ASX 200 index fell 65.87 points, or 1.14
percent, to 5,689.6 at 0606 GMT. The benchmark dipped 0.2
percent on Monday.
Rio Tinto, the world’s second-largest iron ore
producer, sagged 1.4 percent after it trimmed its 2017 iron ore
guidance for 2017 because of bad weather and work to modernise
its rail lines.
The ‘Big Four’ banks, the quartet that account for more than
80 percent of the country’s lending, ended between 1.6 percent
to 1.9 percent lower.
“It was led lower by a selloff in banks which took about 30
points out of the index. Rio released FY guidance which sees
softer iron ore, leading the miners lower,” said Peter Spanos,
Volatility Risk Manager, CMC Markets.
Investors expect capital changes for banks because the
government is planning to expand the powers of the Australian
Prudential Regulatory Authority (APRA).
The benchmark index of financial stocks fell as much
as 1.9 percent, to its lowest in nearly four weeks.
“U.S. Futures and Far East markets have been sold off in
general so that selling pressure has obviously continued,”
Wall Street ended flat in lacklustre trade on earnings news.
New Zealand’s benchmark S&P/NZX 50 index rose 7.76
points, or 0.101 percent, to 5,689.6 at 0607 GMT.
Gains in materials and utilities outweighed losses,
primarily from the healthcare sector, in the index.
Fisher and Paykel Healthcare Corporation led
decliners while CBL Corporation led gainers.
New Zealand’s inflation slowed more than expected in the
second quarter, vindicating the central bank’s determination to
maintain its monetary policy stance.
(Reporting by Hanna Paul; Additional Reporting by Christina
Martin; Editing by Eric Meijer)