* Aussie shares down as much as 0.9 pct
* Banks drag as inquiry into sector rolls on
* NZ shares snap 4 sessions of gains
By Chris Thomas
March 14 (Reuters) - Australian shares fell on Wednesday, with losses dominated by banking stocks amid an inquiry into the scandal-ridden sector, while the departure of yet another senior official from the Trump administration further soured sentiment.
The S&P/ASX 200 index .AXJO fell 0.7 percent or 43.9 points to 5,930.8 by 0027 GMT. The benchmark fell 0.4 percent on Tuesday.
Financial stocks logged the biggest share of losses after the first day of the government-backed inquiry heard National Australia Bank Ltd NAB.AX issued almost $19 billion in home loans under a scheme involving falsified documents. of NAB fell as much as 1.4 percent, while others in the "Big Four" dropped between 0.9 and 1.2 percent.
"The headlines coming out of the first day of the Royal Commission haven't been all that kind to the banking sector, so its not a surprise that banks are off a little bit," said Damien Hennessy, co-founder of Heuristic Investment Systems.
Commonwealth Bank of Australia CBA.AX executives will be questioned later this week about fraudulent broker arrangements and loan applications.
Trump's firing of U.S. Secretary of State Rex Tillerson did not do a lot for investor confidence either, Hennessy noted.
Major U.S. indexes fell overnight as Tillerson's dismissal and the possibility of additional U.S. import tariffs against China dragged down stocks across multiple sectors. MKTS/GLOB
Australian healthcare giant CSL Ltd CSL.AX retreated from recent record highs to drop 1.3 percent.
Telecom stock Telstra Corp TLS.AX was among the top drags on the index, marking its sharpest intraday fall in two weeks with a 2.4 percent drop.
Weak commodity prices kept materials stocks in the red, with the world's No.1 miner BHP Billiton (LON:BLT) BHP.AX down 0.8 percent.
Oil prices fell more than 1 percent on concerns over rising U.S. production, while huge iron ore stockpiles in China sent Chinese iron ore futures to near their weakest level since November. IRONORE/ O/R
New Zealand's benchmark S&P/NZX 50 index .NZ50 snapped four straight sessions of gains to fall as much as 0.6 percent.
Sky Network Television Ltd SKT.NZ was the top loser on the index, plunging 8 percent to a record low.
Telecom company Spark New Zealand SPK.NZ fell as much as 2.2 percent, while a2 Milk Company ATM.NZ slipped 1.9 percent.
The country posted a wider-than-expected current account deficit in the fourth quarter on the back of aircraft imports and robust earnings by foreign firms on local investments, official data showed.