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Category: Stockmarket / Currency / Markets

Shares fall with banks leading decline

Tuesday, 5 Jul 2016 09:19:43 | Michael Janda

Bank shares are down 1 per cent or more in morning trade. (Daniel Munoz, file photo: REUTERS)

Lingering worries about the federal election outcome, especially the increasing likelihood of a bank royal commission, are dragging the local share market lower.

Overall, the benchmark ASX 200 index was off 0.8 per cent to 5,240 by 11:00am (AEST), with the broader All Ordinaries off 41 points to 5,324.

The banking sector is in the red again today after its falls yesterday, with National Australia Bank's 1.5 per cent slide the worst of the big four, while CBA's 1 per cent fall was the smallest.

Banks are on the nose following comments from the banking regulator that they may need to raise more capital in the future to remain amongst the safest institutions in the world.

The federal election also looks increasingly likely to deliver a crossbench in both the lower and upper houses that will be sympathetic to Labor's push for a banking royal commission.

Unlike yesterday, retailers are also being sold off today, with most down more than 1 per cent.

Harvey Norman is leading the decline, slumping 4.6 per cent, while the two big supermarket players Woolworths and Wesfarmers were down 0.7 and 1.4 per cent respectively.

The mining sector has again been propping the market up from bigger falls, with Rio Tinto and BHP Billiton up around half a per cent, South32 up 1.6 per cent and gold miner Newcrest 40 cents to $25.54.

The Australian dollar shrugged off any election and credit rating worries though, rising to 75.25 US cents.

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