Australia shares flat, NAB tumbles after earnings, Fed less dovish
SYDNEY, Oct 31 (Reuters) - Australian shares were flat on Thursday morning, as gains in miners were offset by losses in the financial sector after National Australia Bank slumped on concerns about its British business. NAB shares tumbled 3.5 percent to two-week lows, and last traded down 2.3 percent. The country's top lender by assets reported a record annual profit, but analysts said its earnings potential had been constrained by its struggling British businesses. "I thought it (the result) is good personally, but there is some questions coming out of the quality of its UK business," said Will Cleland, associate director of institutional dealing at PhillipCapital. The NAB losses were taken as a cue by investors to book profits from financial sector's recent rally. Top lender Commonwealth Bank of Australia lost 1.3 percent and Westpac Banking Corp dropped 1.6 percent. "Australian banks had a fantastic rally over the two months. Now with the results out of the way, it's just a little bit of natural profit taking," Cleland said. The big four banks make up around 30 percent of the ASX and have had a stellar year so far with share prices pushed up by record profits and strong dividend yields. The S&P/ASX 200 index was up 1.2 points to 5,431.7 by 0045 GMT, hovering at five-year highs. The benchmark rose 0.3 percent on Wednesday. Investors were also cautious after Wall Street lost ground on Tuesday as the U.S. Federal Reserve's latest policy outlook was seen as steering clear of some of the more ultra-dovish market views. The U.S. central bank kept its $85 billion-a-month stimulus plan intact but did not sound quite as alarmed about the state of the economy as some had anticipated. "Expectations had been for tapering to start in March or April next year; today's call saw the street moving its predictions to January which saw hot money exiting," said IG market strategist Evan Lucas in a note to clients. Support for the market came from global miners BHP Billiton Ltd and Rio Tinto Ltd, which bounced back from earlier losses, edging up 0.3 percent and 0.8 percent respectively. Australia's biggest supermarket Woolworths Ltd climbed 0.9 percent after it reported a 2.5 percent in Australian food and liquor comparable sales in the first quarter of 2014 fiscal year. Leighton Holdings Ltd gained 0.6 percent on news it had been awarded A$249 million Bowen Basin coal contract. Elsewhere, OceanaGold Corp surged 17.4 percent after the gold miners said it expected strong production for the fourth quarter. Biotechnology company Mesoblast Ltd soared 12.0 percent after it said the FDA cleared a new drug trial by Teva Pharmaceutical Industries, which uses Mesoblast's products. New Zealand's benchmark NZX 50 index was flat at 4,868.2. (Reporting by Maggie Lu Yueyang,; Editing by Shri Navaratnam)
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