Australian shares tumble

Australian shares fell 0.5 percent on Thursday in its biggest one-day loss in three weeks on Thursday, hurt by an unexpectedly steep drop in business investment and a sharp fall in Qantas Airways Ltd after poor earnings. The S&P/ASX 200 index fell 25.6 points to 5,411.4. The benchmark edged 0.1 percent higher on Wednesday.
Facing stiff competition in domestic and international routes, Qantas posted a hefty first-half loss and said it plans to cut 15 percent of its workforce. New Zealand's benchmark NZX 50 index slipped 0.2 percent or 8.9 points to 4,964.3. Trading started off on a tentative footing amid escalating tensions in Ukraine which put renewed pressure on emerging market assets.
Shares of Qantas Airways, facing its own struggles against stiff competition in domestic and international routes, tumbled 7.5 percent. The carrier said it plans to cut 15 percent of its workforce, sell older jets and reduce capital spending after reporting a large first half loss of A$252 million.
"What we're hearing is steps to return Qantas to a lower cost base and return to profitability, which is good for Qantas' share price in the medium term," said Julia Lee, equities analyst at Bell Direct, adding that the fixes would take time. Putting further pressure on the market was a surprisingly weak report on capital spending. The data showed Australian business investment fell a steep 5.2 percent last quarter, the biggest drop in over four years, while spending plans for 2014/15 came in under expectations in a blow to the economic outlook.
All 'Big Four' banks fell, with National Australia Bank slipping 0.6 percent and Commonwealth Bank of Australia off 0.5 percent. In the mining space, bluechips BHP Billiton Ltd and Rio Tinto Ltd fell 0.3 percent and 0.4 percent, respectively, as copper slipped to a three-week low on worries about global demand for the metal. The Australian market hit a 5-1/2 year high of 5,461.7 earlier this week, largely underpinned by a solid earnings season, especially in the large-cap miners, banks and other recent high performers.