1. Australian stocks steady despite weaker banks, miners; New Zealand slips

Australian stocks steady despite weaker banks, miners; New Zealand slips

Australia shares held steady on Tuesday, with supports from health care and consumer stocks counteracted by losses in financials and iron miners. The index opened the session higher, but remained well off previous sessions peaks, and traded on either side of flat till midday.

By: | Published: May 23, 2017 11:44 AM
The S&P/ASX 200 index fell 4.105 points or 0.07 percent to 5,767.1 by 0220 GMT.

Australia shares held steady on Tuesday, with supports from health care and consumer stocks counteracted by losses in financials and iron miners. The S&P/ASX 200 index fell 4.105 points or 0.07 percent to 5,767.1 by 0220 GMT. The index opened the session higher, but remained well off previous sessions peaks, and traded on either side of flat till midday.

Biopharmaceutical company, CSL Ltd was the top performer on the index, posting its biggest intraday gain in nearly two weeks. The wider healthcare index rose nearly a percent. Gold stocks rose on the back of higher bullion prices, as a suspected terrorist attack in Britain out the metal’s safe haven status in play.

At least 19 people were killed and 50 wounded in a blast at a concert in Manchester, where U.S. singer Ariana Grande had been performing. The dollar’s weakness against the the euro provided additional support.

“The situation in Manchester is supporting gold prices at the moment, which is hitting a significant technical level here. Most Australian gold stocks are responding to that,” said James McGlew, executive director of corporate stock-broking at Argonaut.

Evolution Mining and St. Barbara, gold majors, rose more than 3 percent each. The downside came from the ‘Big four’ banks which fell less than a percent, after they issued strongly worded statements attacking the government’s new levy on big banks on Monday.

Estimating nearly A$1 billion ($748.10 million) in additional annual costs between them due to the levy, the banks said the new tax would impact not just the bank, but its customers and shareholders. However, Deutsche Bank said that estimates “suggest the headwind from the levy may not be as large as initially thought”.

“Based on Deutsche Bank forecasts, these estimates translate to an impact of around 2 percent to 4 percent on 2018 financial year cash earnings, which is less than our initial estimates of 4 percent to 6 percent for the majors,” it added.

Adding to losses were iron miners, BHP Billiton, Rio Tinto and Fortescue Metals Group which fell after ore traded on the Dalian Commodity Exchange fell 0.1 percent on Tuesday. The metals index fell 0.5 percent.

New Zealand’s benchmark S&P/NZX 50 index slipped 0.29 percent or 21.74 points to 7,387.76, hurt by telecom and energy stocks. The country’s largest provider of mobile phone services, Spark New Zealand slipped 1.74 percent, while fuel supplier Z Energy Ltd fell 1.4 percent.

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