June 22, 2018 / 3:09 AM / 3 months ago

Australian shares tread water as banks counter other losses; NZ falls

* Index on track for biggest weekly gain since Nov 2016

* Banks rally after ANZ doubles its share-buybacks

* NZ drops, a2 Milk and Fletcher Building both slip

By Aditya Soni

June 22 (Reuters) - Australian shares barely moved on Friday, as banks offset losses in other sectors after Australia and New Zealand Banking Group doubled its share-buyback programme.

The S&P/ASX 200 index was down 2.70 points to 6,229.40 at 0301 GMT. The benchmark added about 1 percent on Thursday and was on track for a weekly gain of 2.3 percent, which would be the biggest since November 2016.

No.3 lender ANZ Ltd. said on Friday it would increase its buyback programme by a further A$1.5 billion ($1.11 billion) to A$3 billion.

The announcement drove ANZ’s shares 3 percent higher to a more than three-month high, the benchmark’s biggest boost.

The positive sentiment on ANZ spread in the financials sector, which jumped 1 percent to its highest since March 23.

Mathan Somasundaram, Blue Ocean Equities market portfolio strategist, said the market is now looking for National Australia Bank Ltd to have a buyback programme.

“If ANZ is doing it, the next one with the bigger balance sheet is NAB (National Australia Bank) and then you probably will see some from the others, though probably not as big.”

Shares of NAB firmed 1.7 percent to a more than five-week high, while Commonwealth Bank of Australia strengthened 1.2 percent to its highest since May 8.

Financial stocks are on track to add more than 5 percent this week, benefiting from a weaker local currency which increased foreign interest and boosted export-focused firms.

However, Somasundaram warned that a correction could be on the horizon as foreign buying in the market rooted in the weaker Aussie begins to fade.

The Aussie dollar firmed on Thursday, after slipping for five consecutive sessions.

Materials accounted for most of the losses on Friday, with BHP sliding 0.5 percent and Rio Tinto Ltd declining 0.7 percent.

Energy stocks slipped 0.8 percent, with their fall exacerbated by overnight weakness in oil prices.

Oil and gas company Woodside Petroleum Ltd dropped 0.6 percent and Santos Ltd shed 1.5 percent.

In New Zealand, the benchmark S&P/NZX 50 index fell 0.2 percent or 16.86 points to 8,983.96.

Consumer staples led the losses, with a2 Milk Company Ltd slipping 2.1 percent.

Fletcher Building, the largest construction firm, dropped 1.9 percent. The company, which announced a major restructuring on Thursday, has named in-house director Bruce Hassall as its chairman, replacing Ralph Norris.

$1 = 1.3545 Australian dollars Reporting by Aditya Soni in Bengaluru; Additional reporting by Nikhil Kurian Nainan; Editing by Richard Borsuk

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