July 18, 2017 / 3:53 AM / 6 months ago

Australia shares fall awaiting bank capital changes, New Zealand down

July 18 (Reuters) - Australian shares retreated on Tuesday as investors waited to learn what changes are ahead in bank capital rules while the central bank’s more upbeat economic outlook, in minutes of its last meeting, failed to add cheer.

The S&P/ASX 200 index was down 75.37 points, or 1.31 percent, to 5,680.1 at 0305 GMT. The benchmark slipped 0.2 percent on Monday.

Aside from banking stocks, pressure on the index came from Rio Tinto, which fell as much as 1.9 percent after it trimmed its 2017 iron ore guidance 2017 due to bad weather and work to modernise its rail lines.

The ‘Big Four’ banks, the quartet that account for more than 80 percent of the country’s lending, slid between 1.8 percent to 2 percent. Three of them touched roughly three-week lows while Westpac Banking Corp recorded its biggest intraday slip in over a month.

The benchmark index of financial stocks fell as much as 1.9 percent, to its lowest in nearly four weeks.

There is some caution ahead of release of updated bank capital requirements, said Bill Keenan, general manager of direct equities research at broker Lonsec, noting that the regulator has said the rules will make banks “unquestionably strong”.

“We are waiting to see how much more capital they would need and what time period they would have to boost their profiles,” Keenan added.

The minutes of the Reserve Bank of Australia (RBA) meeting on July 4 showed optimism about the outlook, citing growth in the labour market, public investment and household consumption.

The Australian bourse also reflected the lacklustre performance on Wall Street, which ended flat on earnings news.

Bucking the trend, gold stocks perked up with Newcrest Mining up 1.3 percent as the yellow metal steadied with a fall in dollar.

New Zealand’s benchmark index S&P/NZX 50 fell 7.73 points, or 0.1 percent, to 5,680.1 at 0305 GMT.

The benchmark was pulled down mainly by healthcare stocks with Fisher and Paykel Healthcare Corporation, down 1.7 percent, leading decliners. Air New Zealand fell nearly 2 percent. (Reporting by Hanna Paul; Additional Reporting by Urvashi Goenka; Editing by Richard Borsuk)

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