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04 May 2015
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Shares have given up early gains to trade flat after disappointing earnings from Westpac
fuelled concerns the finance sector is nearing the end of a multi-year run of record
profits.
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Westpac missed forecasts with a flat first-half profit and its dividend grew at its slowes t in
nearly four years, leading to concerns its rivals will show similar strain when they report over the
next week.
Shares in the $110 billion behemoth have slumped 3.7 per cent to $35.39, their biggest
decline since November, to a two-month low.
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The other big banks have been dragged down in Westpac's wake, with ANZ tumbling 2 per
cent, CBA down 1.15 per cent and NAB dropping 1.4 per cent.
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"The Westpac result has weighed heavily on the market," said IG Markets strategist Stan
Shamu. "Everyone's a little bit sceptical about the bank earnings season. People aren't
convinced that they can keep growing earnings and grow dividends the way they used to, and
perhaps valuations shouldn't be where they are."
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Energy stocks also fell, after oil price dipped on news Iraq exports hit a record high, but
Woodside is up 0.2 per cent.
Iron ore miners fared better, still buoyed by Friday's announcement by Vale that it may cut
production and after the price of the key steel-making ingredient remained off its record lows.
BHP Billiton has risen 2 per cent and Rio Tinto has firmed 2.4 per cent.
o Consumer staples companies are also higher amid expectations of a rate cut tomorrow,
with No.1 supermarket operator Woolworths and Wesfarmers, which owns its rival Coles, up
1.8 per cent and 1.5 per cent respectively.
[Sources: SMH, Bloomberg, Financial Review, Yahoo Finance]
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