Aug 18 (Reuters) - Australian shares extended losses on Friday, weighed by banking stocks that accounted for more than half the losses after Wall Street saw heavy selling over worries about Trump’s economic agenda.
U.S. stocks fell on escalating worries over the U.S administration’s ability to move forward with its economic agenda with the latest cause of concern being the speculation over the possible departure of National Economic Council Director Gary Cohn.
The worry that Gary Cohn may follow U.S. CEOs has the market concerned, said Sydney-based Mathan Somasundaram, a market portfolio strategist with Blue Ocean Equities, in a note.
The S&P/ASX 200 index was down 0.8 percent, or 47.1 points, at 5,732.6, as of 0312 GMT. Despite the broad losses, the Australian benchmark is on track to end the week firmer, aided by gains earlier this week.
Financial stocks were the biggest drag, with the “Big Four” banks - Westpac, Commonwealth Bank of Australia , National Australia Bank and Australia and New Zealand Banking Group - losing more than 1 percent each.
“The movement is a reflection of the sell-off we saw in the United States last night. We are just emulating that,” said Tony Farnham, an economist at Patersons Securities.
The banks also came under pressure from a proposal by the government to strengthen its money laundering laws days after accusations against Commonwealth Bank of “serious and systemic” breaches of money laundering laws.
The materials sector also weighed on the index with mining giants such as BHP Billiton and Rio Tinto declining up to 2 percent and 1.6 percent respectively, after aluminium, copper and other base metals edged down from multi-year peaks due to profit-booking.
Declining issues outnumbered advancing ones 5.1-to-1 on the benchmark.
Bucking the trend, Treasury Wine Estates Ltd gained as much as 4 percent, while Origin Energy climbed up to 1.2 percent.
New Zealand’s benchmark S&P/NZX 50 index dipped 0.3 percent, or 20.66 points, to 7,849.4, after scaling record highs in the last three sessions.
CBL Corporation was the biggest loser, plunging as much as 13 percent to record its biggest intraday fall, after the insurance company said it expects to miss operating profit expectations for the first half.
NZX Ltd was down as much as 2.4 percent while Vista Group shed as much as 2.8 percent to touch a five-month low.
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Reporting By Shashwat Pradhan in Bengaluru, additional reporting by Shanima A; Editing by Sherry Jacob-Phillips