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Australian shares hit 8-week low on weak banks, Wall Street slump

Published 18/05/2017, 01:45 pm
© Reuters.  Australian shares hit 8-week low on weak banks, Wall Street slump
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By Hanna Paul

May 18 (Reuters) - Australian shares fell on Thursday as Westpac Banking Corp WBC.AX traded ex-dividend, posting its worst day in nearly eleven months, while a slump in Wall Street due to the worsening White House turmoil added to the gloom.

The S&P/ASX 200 index .AXJO dropped 1.3 percentage, or 77.2 points to 5,709.8 by 0330 GMT. The benchmark fell to its lowest in 8 weeks at one point in the session. The bourse slipped 1.1 percent on Wednesday.

All sectors were in the red with bank stocks accounting for more than half of the losses on the benchmark.

The benchmark index of financial stocks .AXFJ sagged to its lowest in over three months and was on track for a third day of losses.

The country's second-biggest lender Westpac dived as much as 4.7 percent to a 6-month low as it traded ex-dividend.

"Our banks are quite stretched, with the ex-dividend cycle and the effects of the bank tax. A lot of the economy is facing real challenges," said Mathan Somasundaram, Market Portfolio Strategist at Blue Ocean Equities, referring to a new tax on banks in this month's federal budget.

"It's also a follow-on effect of what we're seeing out of U.S. politics," he added.

Wall Street tumbled as concerns mounted over U.S. President Donald Trump's ability to deliver on his tax, banking reforms and infrastructure spending policies, following reports he inerfered with a federal investigation. .N

Global miner BHP Billiton (LON:BLT) BHP.AX joined the top losers in the bourse, falling 1.3 percent, at one point. Activist investor Elliott Management said a meeting with BHP's chief executive this week was 'constructive'. The fund is urging the miner to make strategic changes. world's top fibre cement building materials maker James Hardy Industries JHX.AX dropped as much as 5.7 percent to its lowest in over a month despite reporting positive results. the Fed keeps moving rates higher there will be pressure on the U.S. housing cycle and the local housing cycle. So James Hardie will be threatened at these multiples, said Somasundaram.

New Zealand's benchmark S&P/NZX 50 index .NZ50 fell 0.6 percent or 45.80 points to 7376.70. The index was set for its biggest single-day fall in nearly 6 weeks despite reports of growing consumer confidence in the country in May. and healthcare stocks led losses with Fletcher Building FBU.NZ , down as much as 3.1 percent among top losers on the benchmark.

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