Australian stocks are nursing heavy losses on the final day of trade before the Easter break, as falling commodity prices hit both bank and mining shares.
Key points:
- ASX 200 index down 1.3 per cent to 5,073
- ANZ down 5.5 per cent, Westpac 4.1 per cent
- US Fed official suggested rates could rise next month, AUD fell to 75.2 US cents
The major banks were the biggest drag on the broader market, after ANZ and Westpac announced worsening losses in their loan books.
ANZ has posted the steepest losses of the big four banks, down 5.5 per cent to $23.95 around 1:30pm (AEDT) after flagging a jump of at least $100 million in bad debts because of its exposure to the resources sector, just a month after its most recent quarterly trading update.
The ABC understands the rise relates to ANZ’s loans to the struggling global coal miner Peabody Energy and Australian iron and steel producer Arrium.
ANZ said, while the credit environment remains broadly stable, there are still pockets of weakness associated with low commodity prices.
Meanwhile, Westpac was faring only slightly better, down 4.1 per cent to $31 after revealing it is seeing some stress in consumer loans, mostly in Western Australia and Queensland, both states that are facing the fallout of the mining downturn.
Westpac said provisions for bad consumer debts are likely to rise by around $25 million.
Fed official says there may be a case for April rate rise
Comments from another US Federal Reserve official suggesting the Fed could hike interest rates more than once this year boosted the greenback.
St Louis Fed President James Bullard joined a chorus of officials from the Fed suggesting the US central bank could raise interest rates more than once this year.
“You get another strong jobs report, it looks like labour markets are improving, you could probably make a case for moving in April,” he told Bloomberg TV.
The dollar was buying 75.2 US cents, down around a cent from yesterday, 67.3 euro cents, 84.8 Japanese yen and 53.3 British pence.
The rising US dollar sparked a drop in commodity prices overnight that has weighed on mining stocks.
Commodity falls drive share market slide
Gold, oil and iron all lost ground.
Spot gold has fallen further after overnight losses and was fetching around $US1,218 an ounce.
Oil was flat after its overnight decline; Brent crude had fallen to $US40.48 a barrel.
Gold miners posted the heaviest losses in the sector, with St Barbara the biggest decline on the ASX 200 in lunchtime trade, down 8.2 per cent to $2.01.
Among the high profile names, BHP Billiton and Fortescue Metals have both lost 4.2 per cent.
Elsewhere on the market, all other sectors are advancing, with healthcare and utility stocks enjoying the largest gains.
The stem-cell medicine maker Mesoblast was leading the benchmark index higher, up 6.1 per cent to $2.63 after it was granted a patent in the United States for a treatment for a range of rheumatic conditions.
Overall, the large financial and resources sector outweighed gains elsewhere and, by 1:30pm (AEDT), the All Ordinaries Index was 1.2 per cent lower at 5,141 and the ASX 200 Index was 1.3 per cent lower at 5,073.
[Source:- abcnet]
