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Australia shares hover at 3-week low as banks struggle; NZ slips

Published 19/04/2017, 01:05 pm
Updated 19/04/2017, 01:10 pm
© Reuters.  Australia shares hover at 3-week low as banks struggle; NZ slips

© Reuters. Australia shares hover at 3-week low as banks struggle; NZ slips

By Anusha Ravindranath

April 19 (Reuters) - Australian shares lingered at three-week lows on Wednesday with heavyweight bank shares sold after the central bank flagged risks in the country's housing market, while energy shares continued to drag on persistent weakness in oil prices.

The S&P/ASX 200 index .AXJO fell 0.5 percent or 29.04 points to 5807.7 by 0232 GMT.

Stocks also tracked wider market weakness in the region as presidential elections in France and escalating tensions between the United States and North Korea continued to weigh on investor sentiment.

"There is a view out there now that interest rates are not going to increase in Australia, notwithstanding the fact that the Reserve Bank of Australia would like to see some heat taken out of our housing market prices," said James McGlew, executive director of corporate stockbroking at Argonaut.

"It looks as though rates will remain on hold, but banks are going to struggle a little with new (prudential) requirements and their commercial lending," he said.

Minutes from the Australian central bank's April meeting on Tuesday showed board members saw greater risks in the housing market, and the regulators would be ready to take more measures to cool the market if necessary. the Australian Prudential (LON:PRU) Regulation Authority took steps to combat the explosive growth in house prices by tightening lending standards for home loans. benchmark financial index .AXFJ fell to a more than one week low with the "big four" banks dropping between 0.8 percent - 1.4 percent. Westpac Banking Corp WBC.AX slipped to its lowest level in more than three weeks.

Real estate stocks took a beating with shares of property developers Scentre Group SCG.AX and Stockland Corporation Ltd SGP.AX shedding 2.1 percent and 2.5 percent, respectively.

Sentiment in the market was further dented as growing worries about a production glut pressured crude oil prices O/R

Oil major Woodside Petroleum WPL.AX fell for a third session, while peer Oil Search Ltd OSH.AX hit a three-week low after it announced a drop in quarterly output. large-cap miners such as BHP Billiton (LON:BLT) BHP.AX and Rio Tinto (LON:RIO) RIO.AX reversed early losses, with Rio shares gaining more than 1 percent at one point.

Telecom stocks rebounded, with Telstra shares TLS.AX snapping a four-day losing streak.

New Zealand shares slid to a more than two week low dragged down by industrial and healthcare sector.

The benchmark S&P/NZX 50 index .NZ50 lost 0.51 percent or 36.55 points to 7197.06 by 0233 GMT.

Shares of supply chain logistics company Mainfreight Ltd MFT.NZ and medical device maker Fisher & Paykel Healthcare FPH.NZ fell to a three week low.

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