Banks pull down Australian shares from record high
The S&P/ASX 200 index closed 1 per cent lower at 8,668.20, posting its biggest single-day decline since April 9. The index rose 1.4 per cent on Friday to a record close of 8,757.20.
Banks fell more than 2 per cent in their worst session since April 7 after a 1.6 per cent gain last week. Top lender Commonwealth Bank of Australia declined 2.5 per cent, shedding nearly 8 per cent since hitting a lifetime high in late June. The rest of the 'Big Four' lenders lost between 2 per cent and 3.6 per cent.
'From a fundamental perspective, banks don't look as attractive as miners do,' said Lochlan Halloway, equity market strategist at Morningstar, referring to banks' stretched valuations and rotation into undervalued miners.
'From a valuation's perspective, something of a rotation sort of makes sense, and I think we are seeing some of that playing out at the moment where miners are seeing strong flows at the expense of banks.'
Mining stocks closed at their highest since late February, led by a 4.5 per cent gain in South32 after the world's largest manganese ore producer reported fourth-quarter output above analysts' estimates.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
Sign Up
Sign Up
Index giant BHP recouped early losses to close 0.4 per cent higher. The stock underperformed its peers on a relative basis on the day after a 'strong' 3 per cent gain on Friday following an upbeat quarterly production report, said Glyn Lawcock, head of metals and mining research at Barrenjoey.
Interest rate-sensitive real estate and consumer discretionary stocks fell 0.9 per cent and 1.2 per cent, respectively.
New Zealand's benchmark S&P/NZX 50 index climbed 0.6 per cent to 12,961.51, its highest close since mid-February.
The country's annual consumer inflation accelerated in the second quarter but was below economists' forecasts, data showed, leading markets to narrow the odds on a rate cut next month. REUTERS
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Times
an hour ago
- Business Times
S&P downgrades SingPost's credit rating to ‘BBB-' on downscaling, subdued operating conditions
[SINGAPORE] S&P Global Ratings on Friday (Jul 25) downgraded its long-term issuer credit rating on Singapore Post (SingPost) to 'BBB-' from 'BBB', as it has scaled down with the sale of its Australian logistics and freight forwarding businesses. Its core business also continues to face subdued operating conditions. But S&P added: 'The stable outlook reflects our expectation that SingPost will approach investments prudently, and manage the structural decline in the postal industry.' A 'BBB' rating by S&P means that the company has adequate capacity to meet its financial commitments, but is more subject to adverse economic conditions. 'BBB-' is the lowest grade that an investment-grade company can receive, and is just above a junk bond rating. The credit rating agency also lowered its issue rating on the Singapore dollar S$250 million subordinated perpetual securities that the company guarantees to 'BB' from 'BB+'. The latest downgrades came two years after S&P downgraded SingPost's long-term issuer credit rating to 'BBB' from 'BBB+', on potentially longer-than-expected weakness in its post and parcel segment. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up In its latest report, S&P said it sees the sale of SingPost's Australian logistics business Freight Management Holdings in March 2025 to be transformative, 'representing a significant pivot from the company's earlier strategy to establish Australia as a second home base'. The Australia business accounted for about 50 per cent of operating profits from continuing and discontinued operations in the 2025 fiscal year ended Mar 31, it noted. S&P also flagged the sale of SingPost's freight-forwarding business conducted through Famous Holdings and Rotterdam Harbour Holding earlier this week, after identifying it as non-core. 'The loss of a key earnings pillar shifts the focus back to the postal and logistics business, which is facing structural and operating issues,' the agency said. 'It is also operating at significantly reduced scale and diversity.' The core business faces weak profitability amid persistent structural decline, high fixed operating costs, and rising competition in a highly fragmented market, it said. It added that the operating margin for SingPost's postal and logistics as well as international businesses was about 1 per cent in the 2025 fiscal year, against the post and parcel segment's 15 per cent in the 2020 fiscal year. The agency believes that SingPost's two divestments will have bolstered its cash position by about S$750 million. It is likely to deleverage, to manage its balance sheet, it said. It will also pay out a special dividend of S$202.5 million in the 2026 fiscal year. S&P believes that SingPost's leverage could increase from a net cash position through investment cycles. It said: 'The company has a track record of debt-fuelled expansion.' The credit rating agency has removed its ratings on the company from CreditWatch, where it had placed SingPost with negative implications on Dec 5 last year. Clouded but stable outlook S&P noted that SingPost is undergoing management changes, and said it will wait for clarity on its strategy. The frequent management turnover and strategy changes cloud the operating earnings outlook, it said, adding that the 'strategic backtracking' on the sale of the entire Australia business undermines 'the consistency and execution' of its stated strategy, to diversify away from the domestic business which is facing structural decline. 'In our view, SingPost has to demonstrate its ability to reposition itself in the postal and logistics business under the new management team,' it said, pointing to the constant and ongoing changes to the board and senior management. 'The CEO position has yet to be filled.' But S&P also noted that SingPost is in talks with the government to address the financial sustainability of postal services and the post office network. The agency said that its stable rating outlook on SingPost reflects its belief that the company will prudently pursue investments and manage its postal businesses' structural decline sustainably. But it may downgrade the rating if it expects SingPost's business competitiveness to further weaken, such as in the case where it cannot stop the decline of its postal and logistics core business, or earnings diversity reduces further. A downgrade could also occur if its earnings deteriorate due to competitive pressures, or it chooses an aggressive growth strategy that causes debt to increase materially more than expected. 'A ratio of debt-to-Ebitda (earnings before interest, taxes, depreciation and amortisation) of above 2.5x will reflect such deterioration,' it said. On the other hand, an upgrade could be due if SingPost 'demonstrates a sustained track record of improving profitability across its core postal and logistics business, while maintaining earnings diversity and a conservative balance sheet position'. SingPost shares closed at S$0.63, up S$0.005 or 0.8 per cent higher on Friday, shortly after the report was released.
Business Times
an hour ago
- Business Times
Daily Debrief: What Happened Today (Jul 25)
Stories you might have missed Singapore manufacturing output grows by better-than-expected 8% in June Output in the key electronics sector is up 6.6%, extending May's 3.4% increase. Private home prices up 1% in Q2, rents rise 0.8%: URA The latest index figure is higher than the flash estimate released earlier; new home sales halve to 1,520 units, from 3,139 units in Q1. Median resale prices top S$1 million for 4-room HDB flats in three towns in Q2 BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Overall resale flat prices continue to moderate in the quarter with 0.9% rise. Most Singaporeans are unprepared and underinsured for long-term care: Singlife While long-term care costs close to S$3,000 a month on average, the insurance provider finds that more than half of those surveyed underestimate the amount. Home-based pet boarding in Singapore grows on low cost, high demand Unlicensed but in demand, informal pet sitters are reshaping the scene. But with regulatory hurdles, does this micro-industry have a future?
Business Times
2 hours ago
- Business Times
Japan's trade win, bond yields and Singapore's big bet on the STI
Japan's new trade pact with the US has sent the Nikkei soaring. But is the euphoria justified? In this episode of Market Focus Weekly, a podcast from The Business Times hosted by Emily Liu, Endowus CIO Hugh Chung joins the show to unpack the headlines moving Asian markets this week from bond market jitters and central bank silence to a billion-dollar boost for Singapore's Straits Times Index (STI). And if you're wondering whether the de-dollarisation narrative holds water, or where retail investors are looking beyond the US, we've got you covered. Why listen? Because Japan just bagged a trade win but is the rally overcooked? Markets love momentum, but some parts of the Nikkei are already looking pricey. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Because bond yields are climbing quietly but steadily Japan's 30-year yield just breached 3 per cent. That's not nothing. Because Singapore's MAS is putting real money on the table A S$1.1 billion injection to lift market participation? It's a move worth watching. Because everyone's talking about de-dollarisation but should you care? The noise is loud, but the fundamentals may tell a different story. Market Focus Weekly is a markets podcast from The Business Times, hosted by Emily Liu. Catch past episodes on Spotify, Apple Podcasts or at Do you have a market mystery you want decoded? Drop us a note at btpodcasts@ --- Written and hosted by: Emily Liu (emilyliu@ With Hugh Chung, chief investment officer, Endowus Edited by: Chai Pei Chieh & Claressa Monteiro Produced by: Emily & Chai Pei Chieh A podcast by BT Podcasts, The Business Times, SPH Media --- Follow Market Focus Weekly podcasts every Friday: Channel: Amazon: Apple Podcasts: Spotify: YouTube Music: Website: Do note: This podcast is meant to provide general information only. SPH Media accepts no liability for loss arising from any reliance on the podcast or use of third party's products and services. Please consult professional advisors for independent advice. Discover more BT podcast series: BT Money Hacks at: BT Correspondents: BT Podcasts: BT Branded Podcasts: BT Lens On:
