SYDNEY: Australian shares edged down to 3-1/2 month lows on Wednesday as miners were hit by persistent weakness in iron ore prices and bank stocks fell on earnings concerns, taking the gloss off data showing a jump in consumer sentiment.
The S&P/ASX 200 index declined 14.7 points to 5,600.1 points by 0208 GMT, it’s third straight loss this week. The benchmark fell 0.8 percent on Tuesday, and is down 3.2 percent so far this month.
Investors looked past a survey showing a measure of Australian consumer sentiment surged in May following this month’s interest rate cut and the federal budget.
“The issue around the ASX is that the banks still continue to slide. Until we see a slowdown in the bank sell-off you’re not likely to see a slowdown in the ASX sell-off,” said Evan Lucas, market strategist at IG Markets.
“We look pretty underwhelming and very disappointing in terms of where we sit.”
The banking sector, until recently a stellar performer, has come under pressure on concerns of slowing earnings growth.
The big banks including Commonwealth Bank and Westpac were down 0.5 to 0.9 percent, respectively, and have underperformed the benchmark in the past month.
Weak iron ore prices pulled major miners BHP Billiton and Rio Tinto down more than 3 percent, while Fortescue fell 7.4 percent.
Energy-related shares Santos and LNG also slumped about 4.5 percent each after oil prices fell over 3 percent.
Bucking the trend, iron ore miner Sundance Resources rose as much as 4.8 percent on higher estimate of ore reserves.
