Copyright brecorder
Australian shares fell for a second straight session on Wednesday as investors rotated out of commodity stocks into banks, seeking stability and higher yields amid the central bank’s cautious policy stance.** The S&P/ASX 200 index slipped 0.1% to close at 8,802 points, its lowest since September-end, and now sits 313.2 points below its record high of 9,115.20 hit on October 21. Miners dropped 1.1% to a one-month low, with Fortescue sliding 2.5% on weaker iron ore prices, while Rio Tinto also declined. Gold stocks lost 1.1% as the strongest performing sector, which recently propelled the ASX200 benchmark to record levels, dropped to track bullion’s overnight plunge, posting its third straight session of falls. The day’s losses were more pronounced in small-cap producers like Bellevue Gold, which ended 3.1% lower, while the larger producer, Northern Star Resources, shed 0.5%. Top lender Commonwealth Bank of Australia soared 1.3% to its highest since mid-August, limiting the benchmark’s losses and aiding the financials sub-index to close 0.6% higher, bucking the overall negative trend. National Australia Bank gained 1.7%. Frothy valuations, sector underperformance, and the Reserve Bank of Australia’s cautious monetary policy stance led markets to look towards relatively high-yield, stable banks. “CBA shares are capitalising on the outflow of funds from other sectors today, with the angst levels of the market rising,” said KCM Trade Chief Market Analyst Tim Waterer. “Markets have started showing renewed signs of nerves this week, and in such circumstances, the bellwether banking stocks start to look more appealing.” Technology stocks plunged 2.7% to their lowest since mid-May, tracking Wall Street peers’ fall amidst investor fears of a market bubble. Megaport plunged 9.7%, while sector leader WiseTech Global lost 1.4%. New Zealand’s benchmark S&P/NZX 50 index closed up 0.1% at 13,620.98.
