Australian shares closed lower on Friday (Feb 21), rounding off their worst week in nearly two-and-a-half years, as banking stocks went on a seven-session losing streak that was exacerbated by the central bank’s first rate cut in five years.
The S&P/ASX 200 index closed 0.3 per cent lower at 8,296.2 points on the day. It tumbled 3 per cent this week, its biggest such drop since September 2022.
Financial stocks slid 1.3 per cent on the day, falling more than 1 per cent for the fourth straight session since the Reserve Bank of Australia (RBA) cut rates, threatening margins already under pressure from intense competition. Earlier this week, Westpac reported lower margins for the quarter.
The financial index has tumbled 7.5 per cent in the past five sessions, its worst week since March 2020. It hit a record high last week before embarking on a seven-session slide in which it has lost 7.7 per cent.
“We see further risk to share prices as valuations remain high (with) earnings risks from rate cuts reflected in margins and potential capital outflows,” Macquarie analysts said.
Another laggard on the day was the consumer discretionary index, which fell 1.5 per cent.
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At one end, property classifieds firm Domain Holdings surged 40 per cent after a US$1.69 billion takeover bid from US-based CoStar.
Domain was the top gainer on the all-ordinaries index and also hauled up controlling shareholder Nine Entertainment by 20 per cent.
On the flip side, Domain’s rival REA dropped 11.4 per cent and was one of the top losers on the benchmark ASX 200, while its controlling shareholder News Corp’s Australia-listed shares lost 6.5 per cent.
Mexican fast-food chain Guzman y Gomez tumbled 14.3 per cent, the most on the ASX 200 and also dragged on consumer stocks, after its first-half underlying earnings missed estimates.
New Zealand’s benchmark S&P/NZX 50 index closed 1 per cent lower at 12,752.58. REUTERS
