The share market has been pulled lower by big falls among the major banks after ANZ announced a $3 billion capital raising.
ANZ will raise the funds from investors in response to regulatory moves forcing major lenders to provide an extra buffer for their home loan books.
Uninspiring leads from overseas markets and ANZ’s announcement, which raised expectations of a similar move by other banks, weighed on the market, CMC Markets chief market analyst Ric Spooner said.
“ANZ’s capital raising is probably not a surprise but it reinforces the fact that bank returns may be lower for a while,” he said.
“Also, there’s a bit of selling of other banks as institutional investors in particular make room for increased holdings in ANZ.”
ANZ was in a trading halt on Thursday, while CBA fell $2.82 to $84.55, National Australia Bank reversed 75 cents to $33.59 and Westpac was $1.05 weaker at $33.44.
In the resources sector, BHP Billiton rose 20 cents to $26.69, Rio Tinto added 57 cents to $53.55 ahead of reporting a massive fall in half year profit due to weaker commodity prices, and Fortescue Metals was 2.5 cents higher at $1.91.
Adventure clothing retailer Kathmandu surged 13.5 cents, or 8.9 per cent, to $1.645 as it left the door open for a higher takeover offer after rejecting Kiwi retailer Briscoe’s bid of at least $NZ360 million.
Slater and Gordon dropped 10 cents to $3.17 amid mounting concerns over the law firm’s UK business.
Engineering group Downer EDI slumped 52 cents, or 11.35 per cent, to $4.06 after forecasting a second straight year of weaker profits in the current financial year.
KEY FACTS:
* On Thursday, the benchmark S&P/ASX200 index dropped 63.9 points, or 1.13 per cent, to 5,610.1 points.
* The broader All Ordinaries index shed 59.4 points, or 1.05 per cent, to 5,600.1 points.
* The September share price index futures contract was down 84 points at 5,528 points, with 33,672 contracts traded.
* The price of gold in Sydney at 1700 AEST was $US1,086.30 per fine ounce, down $US1.38 on Wednesday’s price of $US1,087.68.
* National turnover was 1.8 billion securities worth $4.8 billion.
