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Australia shares dragged down by CBA; NZ extends losses

Published 05/09/2017, 01:18 pm
Updated 05/09/2017, 01:20 pm
© Reuters.  Australia shares dragged down by CBA; NZ extends losses
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By Chandini Monnappa

Sept 5 (Reuters) - Australian shares fell on Tuesday as a class action lawsuit against Commonwealth Bank of Australia CBA.AX over a money-laundering scandal knocked the market heavyweight and other financial stocks lower.

Australia's benchmark index S&P/ASX 200 index .AXJO fell 0.4 percent, or 22.60 points, to 5,679.8 by 0104 GMT.

The financial index .AXFJ was down 0.5 percent, its lowest in nearly three months as Australia's four big banks lost between 0.2 percent to 0.7 percent.

A day after CBA announced a major board reshuffle, Australian litigation financier IMF Bentham IMF.AX said it would fund a class action on behalf of all CBA shareholders who bought stock between Aug. 17, 2015 and Aug. 3, 2017 against the bank in relation to alleged money-laundering breaches. not positive for CBA, (but) I don't think it's as big a negative for CBA as one might think," Christopher Conway, head of research at brokerage Australian Stock Report said.

"The best thing they could possibly do between now and whenever the issue is resolved is not do anything else that causes any problem, not cause anymore breaches," he added.

CBA shares fell as low as 1.1 percent to A$73.59 and were down 0.5 percent at 0314 GMT.

Meanwhile, investors also await Reserve Bank of Australia's cash rate decision scheduled to come out later in the day. The central bank is expected to maintain its cash rate at a record low of 1.5 percent, a Reuters poll showed. energy index .AXEJ was down 0.9 percent, after brent crude futures LCOc1 fell as traders pulled money out of oil - seen as a riskier asset - and instead poured it into gold, an investor safe-haven, after North Korea conducted its sixth and most powerful nuclear test on Sunday. O/R

However, Australian mining stocks .AXMM gained 0.2 percent after China's steel rebar futures surged to their highest in over four years, copper prices hit their highest level in three years, and nickel prices touched a two-year peak. IRONEORE/ MET/L

Major miners Rio Tinto (LON:RIO) RIO.AX , Fortescue Group Ltd FMG.AX and BHP Billiton (LON:BLT) BHP.AX gained in the range of 0.5 percent to 0.9 percent, with BHP climbing to its highest in over seven months.

New Zealand's benchmark S&P/NZX 50 index .NZ50 fell 0.3 percent, or 22.82 points, to 7,785.40 by 0126 GMT.

Ryman Healthcare Ltd RYM.NZ was the biggest drag on the index, falling 1.1 percent while, Auckland International Airport AIA.NZ was down 0.8 percent, its lowest in nearly eight months.

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