Australian shares fell 1.4 percent on Monday as growing concerns about credit market losses triggered further selling in Australia and New Zealand Banking Group and other major banks. ANZ shares fell as much as 13.2 percent, its steepest one-day percentage fall since October 1987, after it predicted bad debt charges of around A$1.2 billion ($1.1 billion) in the second half due to the ongoing credit crisis.
ANZ added its full-year earnings per share could fall between 20-25 percent due to the rise in credit impairment costs. "It's a matter of uncertainty at the moment," said Savanth Sebastian, equities economist at CommSec. "Investors are really unsure of the extent of the credit crisis and its impact on the Australian banks."
The benchmark S&P/ASX 200 index fell 67.4 points to 4,903.1 by 0054 GMT, adding to a 3.4 percent decline in the previous session. New Zealand's benchmark NZX-50 index rose 0.5 percent, or 17.15 points, to 3,271.31. The most heavily weighted stock, Telecom Corp of New Zealand, was up 3.2 percent at NZ$3.60. Financial firms fell, extending the previous session's steep declines, on growing worries about credit markets.
ANZ, Australia's third-biggest lender, slumped 11.4 percent to A$15.72 and National Australia Bank Ltd, which announced on Friday another A$830 million in losses from its exposure to US mortgages, lost 3.4 percent to A$25.67. Energy firms declined after oil prices dropped $2 to a fresh seven-week low on Friday, extending a decline that has knocked more than $24 off crude in two weeks as high fuel prices continue to batter demand.
Woodside Petroleum Ltd fell 4.2 percent to A$50.01 and Santos Ltd lost 1.6 percent to A$17.12. Orica Ltd fell 9.8 percent to A$24.25 on resuming trade after it said it has raised about A$600 million in an institutional entitlement offer at A$22.50 a share.
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