Australia Stocks Falter, Weighed by Banking Shares

By Robb M. Stewart Features Dow Jones Newswires

MELBOURNE, Australia--Banking shares weighed on the Australian stock market on Friday, as investors continued to digest the government's plans for a levy on the liabilities of the country's biggest lenders.

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Bank executives have argued against the federal move to raise 6.2 billion Australian dollars (US$4.57 billion), saying they weren't consulted and that any taxes would ultimately get picked up by shareholders or borrowers. Keeping up the pressure on the government, the industry's lobby group on Friday called on the Treasury to release details of the levy and its economic impact.

"The federal budget signaled a further shift from austerity to populism," said Shane Oliver, head of investment strategy and chief economist at AMP Capital in Sydney.

Analysts estimated the levy could cut the big banks' earnings by up to 6% a year, unless they can offset it by raising lending rates and cutting costs.

With most industry sectors weaker for the day, the S&P/ASX 200 fell 41.4 points, or 0.7%, to settle at 5836.9.

Commonwealth Bank of Australia fell 0.5%, for a weekly loss of 3.2%. Australia & New Zealand Banking slipped 0.3% for the session, for a loss this week of 4.7%. Westpac Banking declined 0.2% and investment bank and asset manager Macquarie dropped 1%, while National Australia Bank edged up almost 0.1%.

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Diversified miners BHP Billiton and Rio Tinto rose 0.6% and 0.4%, respectively, but fellow iron-ore producer Fortescue Metals Group sank 2.7%.

Among energy stocks, Woodside Petroleum was 0.6% lower, Oil Search was 0.8% weaker and Santos was down 1.4%.

Still, for the week, the materials and energy subindexes notched strong gains, rising 3.1% and 3%, respectively.

Write to Robb M. Stewart at robb.stewart@wsj.com

(END) Dow Jones Newswires

May 12, 2017 05:17 ET (09:17 GMT)