Australian shares tumbled on Tuesday, with negative sentiment on the financial sector spilling into all sectors ahead of a central bank policy decision. The S&P/ASX 200 index fell 66.767 points, or 1.2 percent, to 5,687.7 by 0312 GMT. The Reserve Bank of Australia (RBA) is expected to stand pat on its 1.5 percent cash rate at its monthly policy meeting later in the day.
“Generally the market is down today because of banks and some profit taking in the utilities and the property sector,” said Bill Keenan, general manager of direct equities research at broker Lonsec. “The utilities sector especially have had a very good run in the past few sessions.”
Keenan said the RBA will hold rates, declining to raise them “because the growth rate of the economy is not that strong at the moment”. Overnight, the leads from Wall Street were negative with declines in Apple pulling Wall Street lower.
Data showing a narrowing current account deficit in Australia, at its smallest in more than 15 years last quarter, also failed to cheer the market. The financial sector, out of favour since the imposition of a bank levy by the Australian government on the “Big 4” banks and Macquarie, declined, with its index 1.2 percent lower.
Each of the Big Four lost more than 1 percent on continued fear the levy will hurt profits. Utility companies AGL Energy and Origin Energy lost 2.5 percent each. Basic material stocks also continued to fall, with Rio Tinto and Fortescue Metals down 0.5 percent and 0.9 percent, respectively, as iron ore and copper fell.
BHP, which has significant oil interests, dropped up to 1.4 percent, its lowest in nearly four weeks, hurt further by declines in oil prices. Energy stocks followed suit with the index 1.6 percent lower as Woodside Petroleum shed 1.1 percent and was on track for an eighth straight daily loss.
New Zealand’s benchmark S&P/NZX 50 index was 0.3 percent higher. Gains were led by the industrial sector as Air New Zealand and Auckland International Airport both rose more than 3 percent.
The financial sector led the losses. with the New Zealand-listed shares of Westpac and ANZ both down more than 3 percent.