Australian shares dropped 0.4 percent on Friday weighed down by financial, energy and resources counters and as corporate earnings continued to disappoint investors. The S&P/ASX 200 index fell 22.7 points to 5,881.5 at the close of trade, still in sight of a 7-year high. The benchmark eased 0.2 percent on Thursday but was up 0.07 percent in the week.
The index, which is up about 9 percent so far this year, is however expected to give up some gains as valuations remain high. It is trading at 14.2 times its 12-month forward earnings, higher than its 10-year average. STW Communications and Transpacific Industries were the top index losers on Friday after dismal earnings. Energy-related stocks were battered down while miners BHP Billiton and Fortescue fell 0.8 and 2.4 percent.
New Zealand's benchmark NZX 50 index ended up 0.4 percent, or 22.72 points, to finish the session at 5,748.95. Medibank Private, Australia's leading health insurer, fell about 4 percent, the most since its listing last year, after it warned that rising healthcare costs were causing customers to cut back on insurance.
Uncertainty in the euro zone continued over the debt negotiations with Greece, adding to investor caution, analysts said. Analysts expected broad-based selling to continue into afternoon session ahead of the weekend. They said volumes remained high despite Lunar New Year holidays in China and some other Asian countries. The index, which is up about 9 percent so far this year, is expected to give up gains as valuations remain high. It is trading at 14.2 times its 12-month forward earnings, higher than its 10-year average.
Fund manager Platinum Investment Management fell as much as 15.4 percent after half-year net profit fell about 4 percent. Transpacific Industries and STW Communications also slumped on weak earnings. Energy-related stocks fell with Santos, Woodside and Origin Energy down 1-3 percent.
Major miner BHP Billiton was down 0.5 percent while Rio Tinto rose 0.7 percent. The Big Four banks including Commonwealth Bank and Westpac fell 0.3-0.5 percent. New Zealand's online accounting software developer jumped 8.1 percent to a four-month high of NZ$20.39 ($15). Online board member services developer Diligent rose 2.5 percent to NZ$6.15, its highest since August 2013 as gains in Xero generated demand for technology shares. Contact Energy fell 1.3 percent to a two-month low extending losses after weak earnings.
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