(Updates to close)
By Nikhil Nainan
Oct 31 (Reuters) - A profit miss from Australia's fourth-largest lender pulled its peers and the country's benchmark index lower on Thursday, despite gains in markets across the rest of Asia after the U.S. Federal Reserve cut interest rates.
Australia and New Zealand Banking Group ANZ.AX reported a near 3% drop in its second-half cash profit amid record low interest rates and tough competition for home loans.
shares reacted with a 3.3% fall, with the other Big Four banks all in the red, declining between 1.1% and 1.3%.
Australia's benchmark S&P/ASX 200 index .AXJO ended 0.4% lower, hurt by the slide in financials - the largest component of the benchmark. The index lost 26 points to 6,663.4, and is down for the month, despite gaining for much of it.
ANZ kicked off the reporting season for the big banks, with National Australia Bank NAB.AX and Westpac Banking Corp WBC.AX expected to report next week, and the country's top lender Commonwealth Bank of Australia CBA.AX , the week after.
Macquarie Group MQG.AX was flat ahead of its results on Friday. The investment bank is scaling back its cash equities businesses outside the Asia Pacific region, and is expected to cut 100 jobs in London and New York. elsewhere in Asia jumped after the Fed cut rates as expected. However, the central bank also culled expectations of further reductions unless the economy takes a turn for the worse. Airways QAN.AX dropped 2.6% after it discovered cracks on one of its planes. media reported that Australia's aviation engineering union has called on Qantas to ground its entire Boeing (NYSE:BA) 737 fleet. stocks were also weaker, with Beach Energy BPT.AX among the biggest losers, dropping 2.6%. Oil prices rose in Asian trade but dropped overnight on supply concerns. O/R
Elsewhere, the gold sector was the only major gainer, with St Barbara SBM.AX advancing 3%.
Morgan Stanley (NYSE:MS), in a note earlier this week, said it favours Australia as a defensive play amid a flurry of global risks keeping investors largely risk-averse.
In New Zealand, the benchmark S&P/NZX 50 index .NZ50 was little changed, closing at 10,787.82.