Bank stocks slump in Australia, but gain in Singapore
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Asian stocks were largely quiet Tuesday after strong gains a day earlier, with Australian bank shares among the laggards.
Earnings season for that sector came to an end with Commonwealth Bank of Australia reporting underwhelming results. The bank also flagged margin concerns, as some smaller peers have.
More pressing is the release later Tuesday of the Australian government's budget proposal. Reports say it will include the introduction of a bank tax.
"This comes as a bit of surprise," said Ric Spooner, chief market analyst at CMC Markets. The chatter has stoked concern of how big a tax might be and whether banks will be able to pass on the costs to their customers, he added.
CBA (CBA.AU) and Westpac (WBK) dropped about 2.5%, while Australia and New Zealand Banking and National Australia Bank (ANZ.AU) shed nearly 2%. UBS dropped Westpac from buy this morning amid anticipation of a sharp slowdown in Australia's housing market because of steps to cool real-estate prices.
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Singapore banks, though, continued their earnings-season gains. OCBC (O39.SG) , the city-state's No. 2 lender by assets, topped estimates and rose 1.1%, helping push up DBS by 1.4% and UOB (U11.SG) by 0.2%. Investors have been relieved about lenders there in regards to loan quality.
Singapore's Straits Times Index rose 0.2%, while Australia's S&P/ASX 200 declined 0.4%.
Most Asian equities markets were seeing modest moves, though Taiwan's Taiex briefly broke through 10,000 for the first time in two years.
Japan's Nikkei eased 0.1% to 19871 after Monday's 2.3% jump to 17-month highs. If signs of a June interest-rate increase from the U.S. Federal Reserve strengthen and enable the dollar to get back to Yen115, the Nikkei could get to 20,500, said Hisao Matsuura, chief strategist at Nomura in Tokyo.
Hong Kong's Hang Seng index rose 0.2%, as China fell further after Monday's slide. The Shanghai Composite pared early losses to recently sit 0.3% lower on the session while the startup-heavy ChiNext in Shenzhen fell 0.4% to 20-month lows.
Hong Kong-listed stocks of gambling companies were mixed. Their U.S.-related stocks fell Monday after Macau said it would introduce further restrictions to curb money laundering in the gambling hub. Those measures are expected to hurt cash availability among some gamblers.
Markets in Korea are closed as voters there elect a new president after former President Park Geun-hye was removed from office over a corruption scandal. The Kospi hit a record high Monday while jumping 2.3%, the biggest daily gain in 20 months.
(END) Dow Jones Newswires
May 08, 2017 23:24 ET (03:24 GMT)