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Australia shares fall as probe hits financials; a2 Milk pushes NZ lower

Published 24/09/2018, 12:20 pm
Updated 24/09/2018, 12:30 pm
© Reuters.  Australia shares fall as probe hits financials; a2 Milk pushes NZ lower

* Financials fall on inquiry into industry

* Materials fall on lower copper prices

* a2 Milk pushes NZ down

By Aditya Soni

Sept 24 (Reuters) - Australian shares weakened on Monday as lower commodities prices weighed on materials stocks and banks and insurers slipped following findings by a high-profile probe into the financial sector.

The S&P/ASX 200 index .AXJO fell 0.2 percent or 11.1 points to 6,183.50 by 0200 GMT. The benchmark gained 0.4 percent on Friday.

Financials stocks bore the brunt of the losses on Monday, hurt by damaging testimony of a quasi-judicial inquiry, which has already exposed widespread wrongdoing in the financial sector.

Some of the largest insurers in Australia, including the local units of multinationals, may have broken laws - some of which carry criminal penalties - the inquiry heard last week. financial index .AXFJ dipped 0.2 percent. Top lender Commonwealth Bank of Australia CBA.AX dropped 0.8 percent to a one-week low, while Suncorp Group Ltd SUN.AX slipped 1 percent.

Risk sentiment in the region was also hurt by the escalation in the Sino-U.S. trade-war, with Beijing cancelling upcoming talks with the Washington. potential for a resolution of the trade dispute, which the markets' biggest concern at the moment is weighing on the opening of the trading here in the Asia-Pacific region and of course in Australia," said Michael McCarthy, chief market strategist at CMC Markets.

Benchmark copper on the London Metal Exchange CMCU3 fell about 1 percent by 0200 GMT, putting pressure on benchmark heavyweights materials stocks.

The metals and mining index .AXMM dipped 0.7 percent to a near six-week low, with global miner Rio Tinto (LON:RIO) Ltd RIO.AX falling 0.4 percent, while South32 Ltd S32.AX dropped 2.1 percent.

Stocks of consumer staples were also under pressure, with Australia-listed shares of a2 Milk Company Ltd A2M.AX falling 3 percent to a near two-week low.

Dairy firm a2 Milk's chief executive, Jayne Hrdlicka, has sold her entire stake in the company, according to a disclosure notice issued by the Australian and New Zealand stock exchanges on Friday.

Meanwhile, shares of drugmaker CSL Ltd CSL.AX fell 1.3 percent and were the biggest drag on the benchmark.

CSL, the country's fifth largest firm by market value, has had a stellar 2018 marked by record earnings and multiple all time highs but has fallen lately on profit taking.

The firm has lost about 10.2 percent this month, on track for its first monthly loss since March. However, CSL is still 44.5 percent higher since the start of the year.

Across the Tasman sea, New Zealand's benchmark S&P/NZX 50 index .NZ50 fell 0.7 percent or 63.79 points to 9,312.18.

Index heavyweight a2 Milk Company Ltd ATM.NZ fell as much as 6.3 percent, its biggest intraday percentage drop in nearly four-months.

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