Financials fall 0.8%, ‘Big Four’ lost $2.09 billion in last four sessions
CSL falls 2.4%, healthcare stocks down 1.8%
NZ50 down 0.4%; RBNZ reaffirms dovish stance
Australian shares ended lower on Thursday, pressured by profit-taking in the banking sector and weakness in healthcare stocks due to concerns over CSL’s restructuring, although gold miners’ rise to a record high limited the overall decline.
The S&P/ASX 200 index ended 0.3% lower at 8,805 points. The benchmark closed 0.3% higher on Wednesday.
Heavyweight financials fell 0.8%, as investors took profits and positioned away from the expensive sector, with the ‘Big Four’ lenders losing nearly A$3.17 billion ($2.10 billion) in the last four sessions.
Top lender Commonwealth Bank of Australia, among the most overvalued bank stocks in the developed economies in terms of its price-to-earnings ratio, shed 0.5%.
“Valuation is one of the key themes driving some of these rotations, hence why we’re seeing profit taking in the expensive banks into some other parts of the market,” said Jun Bei Liu, founder of investment management firm Ten Cap.
The other ‘Big Four’ banks lost between 0.9% and 1.6%.
Biotech major CSL, Australia’s fourth-largest listed company, fell 2.4%, dragging the underperforming healthcare sub-index 1.8% lower.
Market participants are increasingly cautious about CSL’s outlook, amid concerns it may face a downgrade later this year as it restructures and spins off its vaccine division, CSL Seqirus, Liu said.
The healthcare index has logged three straight weekly losses and is set to drop this week if the trend holds, as the disappointing earnings season weighed.
Bucking the trend, gold stocks tracked bullion prices higher to end at a record closing high.
Real estate stocks advanced 0.7%, helped by data centre landlord Goodman Group’s 0.8% gain. The sector benefited from the rotation from banks and healthcare, according to Liu.
New Zealand’s benchmark S&P/NZX 50 index ended 0.4% lower at 13,229.15 points.
The Reserve Bank of New Zealand’s head reaffirmed its dovish outlook for a further 50 basis points of rate cuts by the end of the year. ($1 = 1.5124 Australian dollars)
(Reporting by Nichiket Sunil in Bengaluru; Edited by Eileen Soreng)
