By Aparajita Saxena
Sept 30 - Australian shares fell on Friday, led by financials, on growing concerns about European banks after a report said Deutsche Bank's trading clients have withdrawn excess cash and positions held in the largest German lender.
The bank admitted on Thursday it had an image problem with investors as fresh concerns over its stability pushed its U.S.-listed shares to a record low. S&P/ASX 200 index .AXJO fell 42.95 points or 0.8 percent to 5,428.3 by 0303 GMT.
"There are concerns about the European banking system overall. The real reason to be concerned here is the Italian situation and the plight of Monte dei Paschi and the Deutsche Bank (DE:DBKGn) exposure to it," said Michael McCarthy, chief market strategist with CMC Markets.
"While markets had a bit of panic overnight I suspect that they will stabilize in trading tonight. By the end of today's session we might even see some support for regional banks because they are relatively more attractive than their European counterparts," he added.
National Australia Bank, one of the "big four" Australian banks, fell 1.2 percent, snapping two sessions of gains, and remained poised for its worst intraday percentage performance since September 13.
Australia and New Zealand Banking ANZ.AX shed 0.3 percent, while the other two fell a percent each.
Weaker iron ore and prices put pressure on mining stocks. Index heavyweight Rio Tinto (LON:RIO) RIO.AX edged down 1.2 percent, while BHP Billiton (LON:BLT) BHP.AX tumbled 0.7 percent.
Nickel miners Independence Group NL IGO.AX shed 2.6 percent, while Western Areas Ltd WSA.AX , the second biggest loser on the benchmark, slumped 7.1 percent after nickel prices on the LME CMNI3 tipped into negative territory.
The S&P/ASX 200 Energy (GIC) Index .AXEJ receded 0.7 percent after oil prices slackened due to profit-taking. Santos Ltd STO.AX and Woodside Petroleum WPL.AX fell 2.6 percent and 0.9 percent, respectively.
Entertainment company Southern Cross Media SXL.AX was the biggest percentage loser on the benchmark index .AXJO . It tumbled as much as 16.6 percent, its biggest percentage loss in around 7 years, after Nine Entertainment Co NEC.AX divested its entire stake for A$1.54 per share. Entertainment was the second-best percentage performer on the index, up 2.3 percent.
New Zealand was a shade lower, with benchmark S&P/NZX 50 index .NZ50 down 0.05 percent or 3.67 points to 7,339.7, led by utilities.
Contact Energy CEN.NZ and Meridian Energy MEL.NZ fell 0.8 percent each.
Heartland Bank Ltd HBL.NZ recoiled 2 percent, leading losses in the financial sector. ($1 = 6.6650 Chinese yuan renminbi)