October 8, 2018 / 12:46 AM / 2 months ago

REFILE-Australia shares fall, led by financials and materials; NZ unchanged

(Recasts headline)

* Aussie shares follow global shares

* Banks and materials account for most of the losses

* ANZ dips after flagging annual profit hit

* NZ flat

By Aditya Soni

Oct 8 (Reuters) - Australian shares saw their worst day in more than four weeks on Monday, with banks and materials leading the falls strong U.S. job numbers pushed U.S. Treasury yields higher and knocked world equities.

The S&P/ASX 200 index fell 0.9 percent or 56.7 points to 6,128.8 by 0038 GMT. The benchmark added 0.2 percent on Friday.

Equity markets around the world were under pressure last week after a steep sell-off in U.S. Treasuries, prompted by hawkish comments from U.S. Federal Reserve officials and data widely seen as bolstering the case of further U.S. rate hikes.

Banks bore the brunt of the losses on Monday, with the Australian financial index dipping 1.2 percent.

Michael McCarthy, chief strategist at CMC Markets and Stockbroking said rising treasury yields, were prompting investors to reassess values, which was weighing on market.

McCarthy added “there’s been lot of analysis of this very significant corporate debt being built up over the last few years in a low interest rate environment, and there are concerns that with rising interest rates that some companies might be badly hurt when it comes to roll over that debt.”

Top lender Commonwealth Bank of Australia fell 0.8 percent, dragging the benchmark, while Australia and New Zealand Banking Group Ltd fell 2.3 percent to its lowest since June 19.

ANZ, the country’s No.3 lender, said its annual profit would take a A$711 million ($500.90 million) hit as a result of customer remediation, legal costs from the financial services Royal Commission and restructuring charges.

Australia’s financial sector has been rocked by months of revelations of wrongdoing stemming from a high profile inquiry into the industry.

Materials shares, especially miners piled on the losses, with the metals and mining index falling as much as 2 percent, its biggest intraday percentage loss in nearly five-weeks.

Lower copper and aluminium prices added to the woes of mining stocks. BHP, the country’s largest listed firm fell 1.9 percent, while Rio Tinto Ltd saw its worst day in nearly five-weeks as it dropped as much as 2.5 percent.

Meanwhile, Alumina Ltd fell 7.9 percent and was the biggest percentage loser on the benchmark.

Bucking the trend, cloud services provider MYOB Group surged 20.8 percent to its highest since Jan. 11.

Before market-open MYOB received a proposal from private equity firm KKR & Co to buy the shares it does not already own in the company for about A$1.75 billion ($1.23 billion).

Across the Tasman Sea, New Zealand’s benchmark S&P/NZX 50 index edged 1.87 points lower to 9,213.

Banks led the declines, with New Zealand listed shares of ANZ falling 1.4 percent to their lowest since June 21.

However, a2 Milk Company Ltd rose 3.2 percent, offseting the losses on the benchmark.

$1 = 1.4176 Australian dollars Reporting by Aditya Soni in Bengaluru; editing by Eric Meijer

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