CBA drags Australian stocks lower
04:55, 17 November 2021
Australian stocks extended losses on Wednesday as the country’s biggest lender Commonwealth Bank of Australia (CBA) emerged as the biggest drag following its poor earnings announcement.
Benchmark S&P/ASX 200 index fell 1% to 7,348.20 by Wednesday afternoon and was on track for its biggest intraday loss in three weeks. The index closed 0.7% lower on Tuesday.
Shares in Australia’s largest publicly listed company, CBA, fell over 8% by late afternoon to hit a near four-month low of AUD98.75. The lender flagged weakness in its quarterly net interest margins due to home loan price competition and ultra-low interest rate environment.
Interest rate hike not expected in 2022
Reserve Bank of Australia Governor Philip Lowe said an interest rate hike in 2022 was unlikely, a day earlier.
CBA’s disappointing results dragged the S&P/ASX 200 Financials index 3% lower by Wednesday afternoon.
Australia and New Zealand Banking fell 2.3% to AUD27.77, Westpac Banking slipped 1.8% to AUD22.35 and National Australia Bank lost 1.6% to AUD28.78.
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Japan and HK down
Elsewhere, Japan’s Nikkei 225 index and Hong Kong’s Hang Seng index fell about 0.4% each by Wednesday afternoon.
Food, steel, pharmaceutical and retail trade sectors fell over 1% each in Japan, while bank and real estate stocks emerged as top drags in Hong Kong.
Gaming firm NetEase dropped 3.7% to HKD176.4 in Hong Kong on Wednesday, despite reporting a year-on-year rise in quarterly revenue and profit. The company is set to spin-off its music streaming unit Cloud Village in Hong Kong.
Read more: RBA governor dismisses 2022 rate hike speculation
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