SYDNEY, Oct 29: Australian shares fell 0.4 today morning, stepping back from five-year highs as buying momentum paused ahead of the outcome of the U.S. Federal Reserve’s policy-setting meeting this week.
The pullback was somewhat contained by Australia and New Zealand Banking Group leading a positive opening earnings salvo from the banking sector.
The S&P/ASX 200 index lost 20.6 points to 5,420.3 by 0038 GMT. The benchmark jumped 1 percent on Monday to touch a five-year high at 5,457.3.
‘There was very little lead from overnight, I wouldn’t be surprised that it’s profit taking generally,’ said Martin Lakos, division director at Macquarie Private Wealth.
‘We don’t see anything on the horizon that’s really going to see markets pull back dramatically here,’ he added.
Shares in ANZ, Australia’s third largest bank by market value, rallied 2.2 percent to a record high of A$33.97 after it reported an 11 percent climb in full-year cash earnings. It marked the fourth straight year of record profits for ANZ as it benefited from revenue growth, cost cutting and a drop in bad loans.
Westpac Banking Corp added 0.7 percent to hover at record highs of A$34.82 while National Australia Bank Ltd also gained 0.7 percent, touching six-year highs. The two are due to report their full year earnings in the coming weeks.
Commonwealth Bank of Australia fell 0.9 percent after hitting another record high in the previous session.
The broader market was weighed down by global miners BHP Billiton Ltd and Rio Tinto Ltd. The stocks fell 1.1 percent and 1.9 percent respectively after China’s iron ore futures dropped for a sixth straight session overnight to settle at 4-month lows.
Some top tier defensives also took a breather from their recent strong run. Blood products maker CSL Ltd lost 1.1 percent while Wesfarmers Ltd fell 0.6 percent.
Analysts said investors will wait for the Federal Reserve’s commentary after its meeting ends on Wednesday, where it is widely expected to maintain its $85 billion-a-month bond-buying stimulus. Most predict the central bank to delay any stimulus tapering to at least March next year.
‘Markets will likely take a wait-and-see-approach over the next couple of days,’ said Tracey Warren, stockbroking business development manager at CMC Markets in a note.
New Zealand’s benchmark NZX 50 index was down 1.9 points at 4,861.4.
(AGENCIES)
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