SYDNEY/WELLINGTON, May 23 (Reuters) - Australian shares fell to their lowest in nearly two weeks on Monday as weakness in iron ore prices weighed on the major miners, while a soggy performance by the big banks all but ensured a negative start to the week.
The S&P/ASX 200 index shed 0.3 percent, or 16.5 points, to 5,334.8 by 0211 GMT, having earlier fallen as deep as 5,297.5, its lowest since May 10.
The benchmark has just come off six straight weeks of gains. Since peaking at a nine-month high of 5,425.2 on May 11, it has been drifting sideways.
BHP Billiton fell 1.7 percent, while fellow global miner Rio Tinto shed 1.8 percent. Casting a shadow over the sector, Dalian iron ore futures dropped 5.5 percent, reaching their lowest since early March.
Bucking the wider trend, Bluescope Steel jumped 7.6 percent after the steelmaker cheered investors by lifting its earnings guidance.
The big four local banks were volatile led by a 0.9 percent fall in Westpac Banking Corp. National Australia Bank drifted in and out of positive territory.
Bank stocks have lost at least a quarter of their value from the peaks set in April/May last year and are starting to attract some investors.
“Whilst we were avoiding buying the big four when Westpac and NAB were nudging $40 at the end of FY15, we now believe many market commentators are under-estimating the sustainability of their profits and dividends,” said Uday Cheruvu, a portfolio manager at PM CAPITAL.
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New Zealand stocks were not faring much better with the benchmark S&P/NZX 50 index down 0.3 percent, or 23.6 points, at 6.886.3. Yet, it remained near a record high of 6,988.4 set last week.
James Smalley, a broker at Hamilton Hindin Greene, said investors were largely treading water in “typically light” Monday trading. He noted the overall market was holding up well in a low interest rate environment.
Investors will be watching for full year earnings from some key companies like Fisher & Paykel Healthcare due this week.
Among the top performers, health and beauty products maker Comvita added 4.3 percent while New Zealand Refining Company rose 2.1 percent.
In the other direction, Orion Health shed 4.1 percent and Air New Zealand fell 4.1 percent to 18-month lows. (Reporting by Ian Chua in Sydney and Rebecca Howard in Wellington)