SYDNEY, May 14 Australian shares fell 0.2
percent on Wednesday morning, with healthcare firms tumbling
after the government's budget proposed trimming healthcare
funding among a range of spending cuts, while a handful of
big-cap banks traded ex-dividend.
Commonwealth Bank of Australia grabbed the early
spotlight, climbing 0.6 percent to a record high of A$80.41,
after reporting a 16 percent rise in March quarter cash
earnings, bolstered by revenue growth and cost cuts.
The banking sector has been a key driver of the market in
recent months thanks to record-breaking profits and high
dividends. Over the past few weeks, however, analysts'
downgrades have weighed on some of the major players.
On Wednesday, Westpac Banking Corp and National
Australia Bank dropped after going ex-dividend, down
2.5 percent and 2.8 percent respectively. Macquarie Group
fell 1.2 percent.
The S&P/ASX 200 index lost 12.8 points to 5,485.4 by
0200 GMT. The benchmark rose 0.9 percent on Tuesday.
Healthcare stocks took a hammering after the conservative
government's first budget handed down on Tuesday targeted cuts
in funding for the sector along with several other proposals to
"Obviously the implication is for the healthcare space. The
sector is lagging today," said Simon Twiss, dealer at Arnhem
Primary Health Car Ltd plunged 5.7 percent, and
Sonic Healthcare Ltd dropped 4.4 percent, the worst
performers in the index.
Japara Healthcare Ltd was on a trading halt pending
analysis of the impact of the 2014 budget.
The budget included plans for a deficit levy, higher fuel
taxes and a fee for all doctor's visits from July 2015 to help
return to a surplus within a decade.
While the budget proposals came in largely as expected, a
contractionary fiscal policy aimed at slashing the deficit has
caused some discomfort, said Commonwealth Securities analyst Tom
"In general terms the market has tended to shrug its
shoulders," he said. "The most concerning for stocks was the
extent to which spending would be curtailed."
Big miners were mixed in the morning trade, with BHP
Billiton Ltd up 0.6 percent and Rio Tinto Ltd
down 0.4 percent.
Earthmoving equipment provider Emeco Holdings Ltd
fell 4.9 percent after it decided to exit Indonesian business,
resulting in pre-tax charges of A$41 million for the second half
New Zealand's benchmark NZX 50 index rose 0.1
percent to 5,206.3.
(Reporting by Maggie Lu Yueyang; Editing by Shri Navaratnam)