Weakness in the banking sector has dragged the Australian sharemarket lower at lunchtime as investors shrugged off Wall Street optimism that the Federal Reserve will cut interest rates next week.
The S&P/ASX 200 Index has dropped 57.5 points, or 0.7 per cent, to 8792.1 as of midday AEST, with seven out of 11 sectors in the red, headlined by the big four banks and the energy sector.
Investors took profits in the big banks, sending index heavyweight Commonwealth Bank down 1.3 per cent. Macquarie Group was also off 1.3 per cent.
Westpac slipped 0.8 per cent as Morgan Stanley lowered its share price target and labelled it the “least preferred” major bank. ANZ fell 0.6 per cent amid news it plans to cut 3500 jobs.
“It’s a very low growth market where you’re seeing very high multiples,” Schroders deputy head of Australian equities Andrew Fleming said at a briefing on Tuesday. “As a sector, the banks aren’t growing,”
Energy stocks continued their slide this week following OPEC+’s weekend decision to increase production by 137,000 barrels a day starting in October.
Woodside dipped 1 per cent on Tuesday following a nearly 3 per cent drop the day before, while Viva fell 1.9 per cent, Beach Energy 1.1 per cent and Santos 0.5 per cent.
Stocks on the move
In corporate news, Telix Pharmaceuticals jumped 4.3 per cent after reaching an agreement with the US Food and Drug Administration to resubmit its application for approval for its brain cancer imaging agent with more clinical evidence.
BHP came off 0.7 per cent after settling a class action with Australian investors who bought shares in the company ahead of the Fundao dam failure for $110 million.
And Life360 continued its meteoric rise, gaining another 3.4 per cent, to be up more than 170 per cent in the past ear.