The Australian stock market has taken a sharp drop as shares in the big four banks lose ground.
The sudden fall in bank shares in late morning trade had come “out of the blue”, and dragged the wider market into negative territory, Australian Stock Report senior analyst Benny Sada said.
“Our miners are actually in positive territory today … but it’s the big banks that have turned this market around,” he said.
The losses were unexpected, given a likely cut to interest rates in August, he said.
“We’re trying to put our finger on why the big banks are losing as much as they are,” Mr Sada said.
NAB was down 60 cents, or 1.92 per cent, at $30.63, ANZ was down 61 cents, or 2.05 per cent, at $29.15, Commonwealth Bank was down $1.45, or 1.95 per cent, at $72.76 and Westpac had shed 44 cents, or 1.42 per cent, to $30.45.
Most other sectors of the market were higher, including resources, after the release of economic data from China’s manufacturing sector.
HSBC figures showed manufacturing production shrank in July, with its index down to 47.7 points from last month’s 48.2 points.
An index reading under 50 indicates contraction in the sector.
Despite three straight months of declining activity, Mr Sada said investors were unsurprised given the results matched earlier estimates.
Rio Tinto had gained seven cents to $57.58 and BHP was up 33.5 cents at $34.97.
The supermarket chain owners were also higher, with Woolworths up 27 cents at $33.59 and Coles-owner Wesfarmers up 24 cents at $40.80.
Meanwhile, Transurban shares had added 12 cents to $6.90 after the toll road owner posted strong profit growth in the 2012/13 financial year and forecast traffic growth in the current year.
KEY FACTS
* At 1216 AEST, the benchmark S&P/ASX200 index was down 5.2 points, or 0.1 per cent, at 5,046.8 points.
* The broader All Ordinaries index was down 1.7 points, or 0.03 per cent, at 5034 points.
* On the ASX 24, the September share price index futures contract was 11 points lower at 4999 points, with 15,724 contracts traded.
* National turnover was 721 million securities worth $1.7 billion.
