Banking, goldminers dragging Aussie shares lower

The local share market has fallen, retreating from record levels amid losses by the banks amid disappointing earnings from Westpac and Bendigo and Adelaide.

Goldminers were also struggling amid a pullback in the price of the yellow metal, while insurance companies were dropping after Opposition Leader Peter Dutton accused them of price gouging and threatened to break them up if the coalition wins power.

At noon AEST on Monday, the benchmark S&P/ASX200 index was down 51.1 points, or 0.6 per cent, to 8,504.7, while the broader All Ordinaries was down 44.9 points, or 0.51 per cent, to 8,776.7.

The ASX’s financial sector was down 1.9 per cent at midday, with Westpac dropping 5.4 per cent to a four-week low of $32.84 and Bendigo and Adelaide plunging 16.7 per cent to a nine-month low of $11.18 following their financial updates.

Westpac said its net profit after tax for the three months to December 31 was down nine per cent to $1.7 billion, which it attributed to hedge accounting that would reverse over time.

Bendigo and Adelaide meanwhile said it made $265.2 million in cash earnings in the six months to December 31, down 1.1 per cent from a year ago and down nine per cent from the previous quarter.

“Our earnings have been challenged both on the income and expense lines,” chief executive and managing director Richard Fennell said.

Income was hit by margin pressure, driven by higher funding costs, while the rise in expenses included wage inflation, new digital assets and price rises from existing technology vendors.

The other big banks were down as well, with NAB dropping 1.8 per cent, ANZ falling 1.6 per cent and CBA dipping 1.7 per cent.

Elsewhere in the sector, Suncorp Group had dropped 6.4 per cent and IAG had retreated 3.4 per cent after Mr Dutton floated the idea over the weekend of extending the coalition’s plan to carve up supermarkets into the insurance industry to stop consumers from getting “ripped off”.

But Nationals Leader David Littleproud said on Monday the divestment plan hadn’t been approved by the joint party room because it “wasn’t a policy”.

Meanwhile, gold had fallen to back below $US2,900, changing hands at a five-day low of $US2,887 ahead of the release of Federal Reserve minutes and lacklustre US retail sales data released Friday.

Northern Star was down 3.7 per cent, Newmont had dropped 2.4 per cent and Evolution had retreated 2.8 per cent.

As for the iron ore giants, BHP was down 0.4 per cent, Fortescue had dipped 1.1 per cent and Rio Tinto had subtracted 0.8 per cent.

Chalice Mining had soared 32.3 per cent to a three-month high of $1.5875 after the company announced that testing had revealed copper and nickel concentrates could be produced from its Gonneville project northeast of Perth without a complex, high-cost metallurgical process.

In the consumer staples sector, A2Milk had rocketed 18.0 per cent to a six-month high of $7.02 after the Kiwi dairy company said it would pay its first-ever dividend after better-than-expected sales of infant formula in China.

In tech, Audinate had soared 30 per cent to $9.85 after the professional audio-visual networking equipment company reported making a $US16 million gross profit in the first half, down 29 per cent from six months ago but apparently better than traders were expecting.

The Australian dollar was at a fresh two-month high against its US counterpart, buying 63.60 US cents, from 63.23 US cents at 5pm on Friday.