SYDNEY/WELLINGTON, March 24 (Reuters) - Australian shares fell to their lowest in three weeks on Thursday, while their New Zealand counterparts recoiled from yet another record high as investors turned defensive ahead of the Easter long weekend.
Australian and New Zealand financial markets will be shut from Friday and reopen on Tuesday.
Australia's S&P/ASX 200 index .AXJO was down 1.18 percent, or 60.47 points, at 5,081.80 by 0210 GMT. It fell as far as 5,069.20, reaching a low not seen since March 3. On the week, it was down about 2 percent.
New Zealand's benchmark S&P/NZX 50 index .NZ50 was a touch firmer at 6,675.68, having earlier climbed 0.3 percent to an all-time high of 6,692.08. The index has been setting successive record highs since Friday. On the week, it was up 0.8 percent.
Analysts said an interest rate cut by the Reserve Bank of New Zealand (RBNZ) earlier in the month and expectations of more policy easing have helped underpin appetite for stocks.
"When you bring down interest rates, the valuation of stocks goes up and I think that's what the Reserve Bank has managed to do," said Brad Gordon, investment adviser at Macquarie Equities.
Among the gainers on Thursday, online auction company Trade Me TME.NZ put on 1.6 percent, while Fonterra's FCG.NZ fund, which provides investor exposure to the farmer-owned dairy exporter, rose 0.2 percent. software company Xero XRO.NZ eased 0.5 percent and steel company Steel Tube STU.NZ lost 2.2 percent.
In Australia, banking stocks were a major drag on the index, led by a near 6 percent drop in Australia and New Zealand Banking Group shares ANZ.AX .
ANZ disappointed investors after it flagged bad debt charges of more than A$900 million ($677 million) for first-half 2016, A$100 million more than its previous guidance.
The bank said this was due to its exposure to pockets of weakness associated with low commodity prices in the resources sector and in related industries.
The warning cast a shadow over the entire sector. Commonwealth Bank CBA.AX , Westpac Banking Corp WBC.AX and National Australia Bank NAB.AX all suffered losses of between 2 percent and 4 percent.
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