Australian equities slip on weak bank earnings and Middle East tensions
Australian and New Zealand equities retreated as disappointing bank and retail earnings offset gains in the resources sector amid stalled US-Iran peace negotiations.
Australian equities retreated on Monday as weak corporate earnings from major lenders and retailers overshadowed gains in the resources sector. The S&P/ASX 200 index dropped 0.3 per cent to 9,084.10, extending a 1.6 per cent decline from the previous week.
National Australia Bank led the broader market lower, plunging as much as 4.8 per cent during the session. The lender reported a 15 per cent decline in third-quarter domestic home loan applications compared with the second quarter.
The poor results dragged the wider banking sector down by 1 per cent. The update concludes a bruising August reporting season for the country's major financial institutions.
Mounting concern surrounds the potential repeal of lucrative property-investment tax breaks. Market participants fear these legislative changes could severely constrain future credit growth and bank earnings.
Among the Big Four banks, only Commonwealth Bank of Australia managed to trade flat, while its peers remained in the red. Retail also faced severe pressure, with electronics chain JB Hi-Fi heading for its worst trading session since late March 2020.
The retailer disclosed that total sales across its Australian operations fell 0.5 per cent in the opening month of fiscal 2027. These disappointing top-line figures weighed heavily on the consumer discretionary sector during the session.
Conversely, the resources and energy sectors provided a buffer for the broader index. Mining stocks climbed as much as 1.5 per cent, supported by upward momentum in iron ore prices established on Friday.
Energy shares also advanced 1 per cent as crude oil futures gained more than $1 a barrel. The upward pressure on commodities was exacerbated by stalled peace negotiations between the United States and Iran.
Risk appetite faltered as oil tanker traffic through the Strait of Hormuz remained halted without a clear resolution in sight. Precious metals also attracted capital, with gold stocks jumping 2.4 per cent as bullion prices tracked toward a weekly gain.
Evolution Mining and Northern Star Resources posted intraday advances of 2.1 per cent and 2 per cent, respectively. Across the Tasman Sea, New Zealand’s benchmark S&P/NZX 50 index edged 0.1 per cent lower to 13,837.
The dairy sector weighed heavily on the local bourse after a2 Milk sank as much as 10.2 per cent. The producer reported a 44 per cent collapse in its full-year profit, dragging the wider market downward.
