News from AAP

Banks, BHP drag back Aust market

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The Australian share market has closed more than one per cent lower, dragged back by the big banks and global miner BHP Billiton.

“It’s one of those days where the banks are leading the charge lower,” CMC Markets chief market analyst Ric Spooner said.

Mr Spooner said generally higher bond yields of late had been a negative factor for the share market, and high-yield stocks such as the banks were being sold off.

The banks might also have been affected after the Reserve Bank of Australia warned borrowers against taking on too much debt as concerns grow about a potential housing bubble in Sydney and Melbourne.

Also, the local market’s failure last week to lift above the 5,750 point level had caused some nervousness among investors and was encouraging profit-taking.

The other major influence on the local bourse was the slide in BHP Billiton’s share price after its spin-off South32 started trading at noon.

BHP Billiton fell $2.36, or 7.26 per cent, to $30.13.

South32, which is now Australia’s third largest miner, began trading at noon at $2.13 and closed at $2.05.

Elsewhere in the resources sector, mining giant Rio Tinto shed 65 cents to $57.45, and Fortescue Metals was flat at $2.29.

Among the major banks, the Commonwealth dropped $1.75 to $83.00, Westpac reversed 83 cents to $32.22, ANZ retreated 84 cents to $32.28, and National Australia Bank backtracked 52 cents to $34.00.

Agribusiness Elders jumped 17 cents, or 5.35 per cent to $3.35 after its half year underlying profit more than tripled, partly due to higher livestock prices.

Paints maker DuluxGroup lost 36 cents, or 5.5 per cent, to $6.19 after its half year net profit fell 17.5 per cent.

KEY FACTS

* At 1622 AEST on Monday, the benchmark S&P/ASX200 index was down 76.3 points, or 1.33 per cent, at 5,659.2 points.

* The broader All Ordinaries index was down 70 points, or 1.22 per cent, at 5,660 points.

* The June share price index futures contract was 81 points lower at 5,666 points, with 29,409 contracts traded.

* National turnover was 1.9 billion securities worth $5.3 billion.