* Bank stocks, CSL largest drags on index
* ASX 200 to gain for third straight week
* Financials drop after 4 straight gaining sessions
By Ambar Warrick
June 21 (Reuters) - Australian shares dropped on Friday but hovered around a more than 11-year high as hopes of monetary policy easing at home and in the United States led to sustained buying of equities this week.
The S&P/ASX 200 index fell 0.3% or 18.6 points to 6,669.0 by 0202 GMT. The benchmark rose 0.6% on Thursday to its highest level since the 2008 financial crisis, and was set to gain about 1.7% for the week.
Minutes of The Reserve Bank of Australia’s (RBA) latest meeting, released on Tuesday, showed that the bank saw further interest rate cuts as a necessity to spur local economic growth. On Thursday, RBA Governor Philip Lowe also called on the government for more action on fiscal stimulus, with markets pricing in chances of a cut as soon as July.
Dovish cues from the RBA had seen Australian equities firming even before the U.S. Federal Reserve’s indication of future interest rate cuts sent global equities higher this week.
For the day, financial stocks, the benchmark’s largest sector, declined about 0.6% after ending at a 10-month high on Thursday. The country’s big four banks declined in the range of 0.5% to 1.4%, with Australia and New Zealand Banking Group leading declines.
The financial subindex however, was set to add about 2% for the week.
Biotherapeutics company CSL Ltd, the fourth-largest stock on the ASX 200, dropped nearly 3% after it flagged lower Chinese sales in 2020 due to a change in its distribution model.
CSL was also one of the largest intraday losers on the ASX 200.
On the positive side, metals and mining stocks firmed, with the country’s heavyweight iron ore miners boosting the subindex on the prospect of stronger iron ore prices after Rio Tinto cuts its Pilbara shipment guidance on Wednesday.
Rio is among the largest iron ore miners in the world, and a cut to its shipments guidance spells tighter supply, which could push up iron ore prices in the future.
Peers BHP Group and Fortescue Metals rose about 0.6% and 2.5%, respectively.
For the week, the metals and mining subindex was set to add about 1.8%.
New Zealand stocks were slightly lower as financial stocks weighed. The benchmark S&P/NZX 50 index fell about 0.1% or 6.64 points to 10,284.12.
The index was set to add about 0.5% for the week.
The New Zealand shares of Westpac Banking Corp and Australia and New Zealand Banking Group declined about 0.2% and 1.2%, respectively.
Reporting by Ambar Warrick in Bengaluru; Editing by Simon Cameron-Moore