MELBOURNE, Australia--Further declines by large banks on Friday held back strength in the miners and extended the Australian stock market's decline this week.
It was a second straight week of losses for the major banks, which carry a heavy weight in the market and are among the biggest stocks by value, since the government laid out plans in its budget for a tax on liabilities to raise funds needed to plug a deficit.
Continue Reading Below
That overshadowed the resource sector at the tail end of the week, as mining stocks were buoyed by signs demand for iron ore is holding up.
Sliding for a third straight session, the S&P/ASX 200 fell 10.9 points, or 0.2%, to end at 5727.4. The four largest banks collectively knocked more than 13 points off the index.
That cemented the sharpest weekly drop since early November, with a loss of 1.9%. The financial subindex dropped 3.6% over the five days, to its lowest reading since early February.
"Australian shares are now down by around 4% from their high earlier this month and have been hit by the weak global lead combined with pressure on the banks as a result of the budget's bank levy along with expectations for slowing credit growth," said Shane Oliver, head of investment strategy and chief economist at AMP Capital in Sydney.
For the day, 1.9 billion shares were traded worth 5.1 billion Australian dollars (US$3.78 billion), Commonwealth Securities said.
Australia & New Zealand Banking led the big banks down, losing 1.9%. Westpac Banking declined 1%, Commonwealth Bank of Australia dropped 0.7% and National Australia Bank weakened by 0.6%. Investment bank and asset manager Macquarie, which is also expected to be squeezed by the new tax, managed a rise of just under 0.1%.
With Chinese iron-ore future higher, BHP Billiton and Rio Tinto rose 1.4% and 2.3%, respectively, and Fortescue Metals Group rallied 5.7%.
Fairfax Media picked up another 0.4%, widening its advance for the week to 16% after it revealed it now had two competing takeover offers from U.S. private-equity suitors.
Write to Robb M. Stewart at email@example.com
(END) Dow Jones Newswires
May 19, 2017 03:58 ET (07:58 GMT)