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Australia shares end lower hurt by financials; NZ gains

Published 13/05/2019, 04:44 pm
© Reuters.  Australia shares end lower hurt by financials; NZ gains
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* CBA's Q3 results disappoint, books further remediation charge

* ANZ, Macquarie trade ex-div, drag financials

* Defensive stocks rise amid trade uncertainty (Updates to close)

May 13 (Reuters) - Australian shares ended lower on Monday, as disappointing earnings from the country's biggest bank weighed on financials, although losses were offset by gains in healthcare and gold stocks.

The S&P/ASX 200 index .AXJO closed down 0.2%, or 13.30 points, at 6,297.60. The benchmark rose 0.3% on Friday.

Financial stocks .AXFJ closed down 1.8% at a near 4-week low after Commonwealth Bank of Australia CBA.AX took a hit to its third-quarter cash profit and announced a further A$714 million ($498.6 million) in provisions to compensate customers for being overcharged or wrongly billed for services not provided. and other top banks have spent millions in compensation to wronged customers, as they attempt to mend their reputation after the damaging Royal Commission enquiry into systemic misconduct in the sector. fell 2.5%, while National Australia Bank NAB.AX lost 2%. Westpac Banking Corp WBC.AX edged slightly lower.

"This update was consistent with trends seen across the other banks, with revenue pressure, elevated costs and deteriorating asset quality...with significant headwinds facing the banks, it is difficult to see much upside," UBS said in a note.

May is also usually a weak month for Australia's financial sector as top banks trade ex-dividend during the period, said Mathan Somasundaram, Market Portfolio Strategist at Blue Ocean Equities.

Australia and New Zealand Banking Group ANZ.AX fell 3.9% while Macquarie Group MQG.AX shed 3.6%, as shares of both banks traded ex-dividend.

NAB and Westpac are set to trade ex-dividend on May 14 and 16, respectively.

An apparent deadlock in trade negotiations between the United States and China, with Washington demanding promises of concrete changes to Chinese law while Beijing remained defiant, kept the market in a state of uncertainty. MKTS/GLOB

Investors took cover in healthcare stocks .AXHJ , a defensive sector in times of market volatility, with index heavyweight CSL CSL.AX ending 1.4% higher.

Gold miners .AXGD also rose as investors snapped up safe haven assets, with top miner Newcrest Mining Ltd NCM.AX gaining 0.5%.

Across the Tasman Sea, New Zealand's benchmark S&P/NZX 50 index .NZ50 closed up 0.3% or 27.46 points at 10,126.83.

Utilities provider Trustpower TPW.NZ rose 2.9% while telecom service provider Spark New Zealand SPK.NZ gained 1.8%.

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