Financials pull Australian shares lower as inquiry findings weigh
* Financials lower following interim Royal Commission report
* 'Big Four' banks all in the red
* Labour day holiday in New South Wales, South Australia and
Australian Capital Territory
By Nikhil Nainan
Oct 1 (Reuters) - Financial stocks dragged Australian shares
lower on Monday, rocked by scathing findings in an interim
report into the sector, despite initially brushing aside the
Financials lost 1.3 percent, pulling the S&P/ASX 200
index down 0.6 percent, or 36.9 points to 6,170.7 by
In almost 60 days of public hearings, the powerful Royal
Commission inquiry heard evidence of bribery, fraud, fee-gouging
and board-level deception across the industry, prompting many
calls for prosecutions.
Investors initially shrugged off the findings on Friday,
with the S&P/ASX 200 rising 0.4 percent when the report made no
immediate recommendations for any legal action or reform.
Commissioner Kenneth Hayne's report was otherwise brutal in
its assessment of the industry's ethical standards and
governance, while also criticising regulators' efforts to police
"I do not think prosecution is going to weigh the banks so
much," said Dale Raynes, associate Director at CPS Capital.
"If the Royal Commission inhibits the way in which they can
make money from the consumer, that will be viewed as a
The 'Big Four' banks were all in the red, with Westpac
Banking Corp and Australia and New Zealand Banking
falling the most, down 1.7 percent and 1.2 percent.
A final report is due in February, which could recommend
major regulatory reform for banks, financial advisers, pension
funds and insurers, as well as civil and criminal prosecutions.
Elsewhere, mining stocks edged lower as investors
faced a lack of guidance, with key resources market China on a
"The miners will probably drift .. and will be trading
probably on low volume with a lack of direction coming out of
China." said Raynes.
Global miners BHP edged lower while Rio Tinto
fell 0.6 percent.
Rio, alongside its joint venture partners, said it will
invest about $1.55 billion to sustain production capacity at two
iron ore projects in Western Australia, while it is in talks to
sell its controlling stake in Namibia's Rossing uranium to China
National Nuclear Corporation, according to media reports.
The moves come as Rio has sells off what it considers
non-core assets, focusing instead on core commodities such as
New Zealand's S&P/NZX 50 index fell 0.4 percent to
9,316.33, with local listings of Westpac and ANZ
Index heavyweight Air New Zealand fell 1.8 percent.
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(Reporting by Nikhil Kurian Nainan, additional reporting by
Shanima A in Bengaluru. Editing by Eric Meijer)
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