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Australian market tumbles at open with banks, other majors down

Xinhua, May 17, 2017 Adjust font size:

The Australian share market opened down on Wednesday, with many of the majors taking a dive in early trade.

At 1036 local time AEST, the S&P/ASX200 index was down 47.10 points, or 0.81 percent to dip to 5,803.40 points, while the wider All Ordinaries index also tumbled down 43.20 points or 0.73 percent to be 5,839.00 points.

Chris Weston, chief market strategist at IG, told Xinhua on Wednesday that the bank levy that is being imposed on the four major banks has been part of the reason why the market has taken such a downturn this morning, with 33 of the points dropped attributed to them.

"When the government is taking on the banks, they have the oligopoly, they have pricing power, one of the concerns as an investor when you are holding a banking stock is that at some stage you may run into government regulation," Weston said.

"That's a big risk that people have when holding these investments, and that risk is being realised at the moment, that the banks are facing these headwinds of higher government regulation."

Weston also said that the ongoing circumstances surround the explosive allegations levelled at U.S. President Donald Trump have played a role in the market drop this morning, with investors engaging in risk aversion tactics, with a small bright note being the rise in the price of iron ore.

In the banks, the Commonwealth Bank of Australia was down 1.57 percent, Westpac also fell down 1.52 percent, the ANZ fell 1.25 percent, while the National Australia Bank dropped 1.68 percent.

The miners performed well, with BHP up 0.62 percent, Rio Tinto gaining 1.96 percent, Fortescue surging 3.11 percent, while Newcrest also delivering up 2.82 percent.

In the oil and gas majors, Woodside Petroleum was down 0.09 percent, Santos also fell 2.22 percent, while Oil Search held firm for no gain.

Grocery giant Woolworths dropped 0.82 percent, while rivals Wesfarmers also had a 1.21 percent cut in their value in the early going.

Airline Qantas couldn't continue their run, dropping 0.20 percent, while telco giant Telstra also fell down 0.57 percent. Endit