* ANZ posts better-than-expected results
* Investors still sell-out of record-high financials
* Handful of defensives buck trend, to edge higher
(Adds analysis, quotes, stocks on the move)
By Thuy Ong
SYDNEY, May 1 Australian shares slipped 0.6
percent on Thursday morning, as investors booked profits in
pricey financial sector stocks on the back of recent analysts'
downgrades, hitting the likes of ANZ bank even as it boasted
strong first half earnings.
Big-cap mining stocks also weighed on the market, although a
largely in-line China manufacturing survey for April had only a
BHP Billiton Ltd slipped 0.4 percent, Rio Tinto Ltd
lost 1.1 percent, and Iluka Resources Ltd fell
1 percent, mainly dragged by lower metal prices overnight, with
copper, iron ore and gold all losing ground.
The S&P/ASX 200 index was down 32.8 points to
5,456.3 by 0230 GMT. The benchmark, which finished a tick higher
on Wednesday, hit a near 6-year high of 5,554.5 on April 29 but
has since drifted lower.
The early focus fell on Australia and New Zealand Banking
Group Ltd, which reported an 11 percent rise in cash
profit, boosting its dividend as strong growth in its Asia
business helped it beat analysts' expectations.
ANZ shares dropped 1.4 percent, Westpac Banking Corp
lost 1 percent, while Commonwealth Bank of Australia
was flat, as investors worried the banks' share prices
were running too far ahead of their ability to grow future
"Overall the banks' value are pretty high, their net active
balance is about 22-25 percent higher. In the last year, the
prices have kept going up and hitting record highs," said Biyi
Cheng, head of Asia-Pacific dealing at City Index.
He said recent analysts' downgrades of banks' outlooks were
also keeping sentiment in check.
"There's a current market pressure to push prices down at
The three top-tier banks had reached all-time highs in
previous sessions driven by record earnings and strong dividend
yields of between 4.8 percent to 5.4 percent.
China's factory activity inched up in April, a hopeful sign
of some stability in the world's second-largest economy
following a loss of momentum in recent quarters. China is
Australia's biggest export market.
The official Purchasing Managers' Index rose to 50.4 in
April from March's 50.3, the National Bureau of Statistics said
on Thursday, and only a touch below expectations for a rise to
50.5, which led to investors largely shrugging off the result.
A handful of defensive stocks climbed with Wesfarmers Ltd
bouncing 1.2 percent and blood products maker CSL Ltd
adding 0.6 percent.
Woolworths dropped for another session, shedding 1.7 percent
after saying its third quarter sales from continuing operations
rose less than analysts had expected.
New Zealand's benchmark NZX 50 index fell 0.5
percent to 5,206.5.
(Reporting by Thuy Ong; Editing by Shri Navaratnam)