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Australia shares end lower on weak earnings forecasts

Published 13/08/2020, 04:48 pm
© Reuters.
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(Updates to close)

By Soumyajit Saha

Aug 13 (Reuters) - Australian shares fell on Thursday, dragged down by losses in banks and utilities stocks, as a series of poor earnings forecasts fanned fears of more financial pain from the COVID-19 crisis.

The S&P/ASX 200 index .AXJO fell 0.7% to 6,091.0 at the close of trade.

"The outlook from (the country's) largest lender Commonwealth Bank CBA.AX has presented a rather realistic, and thereby negative, outlook in terms of the long-term effects of COVID-19," said Nick Twidale, general manager at IC Markets.

Commonwealth Bank's Chief Executive Matt Comyn said on Wednesday the bank expected lower credit growth and low interest rates to put pressure on its revenue. financial subindex .AXFJ lost over 1% on Thursday, with all of the "Big Four" banks falling between 1.3% and 2.6%.

The country's top power producer, AGL Energy AGL.AX , and telecom giant Telstra Corp TLS.AX also forecast sharp drops in their earnings for fiscal 2021, sending their shares down 9.6% and 8.3%, respectively. weak outlook also weighed on the wider utility sector .AXUJ , which dropped about 4%.

Meanwhile, scandal-hit AMP Ltd AMP.AX ended over 10% higher after it said it would return about $400 million to investors in the form of a special dividend and a share buyback. and healthcare stocks were also lower, with biotech behemoth CSL Ltd CSL.AX losing 1.4%, while toll road operator Transurban Group TCL.AX dropped 1.8% after two brokerages cut price targets for its stock. the Tasman Sea, New Zealand's benchmark S&P/NZX 50 index .NZ50 rose marginally to 11,500.82, helped by gains in real estate and consumer stocks.

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