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Highlights
- Australian sharemarket sees a drop as bank stocks slump following disappointing results.
- Strong gains from BlueScope (ASX:BSL) and other non-financial stocks balance the downturn.
- Insurer and gold mining stocks also face pressure amid regulatory fears and market shifts.
The Australian sharemarket experienced a decline on Monday, primarily driven by weak performance from the banking sector, following disappointing results from major players like Westpac (ASX:WBC) and Bendigo and Adelaide Bank (ASX:BEN). The S&P/ASX 200 Index fell by 0.6%, losing 54.6 points after closing at a record high on Friday, retreating from the previous week's modest 0.5% gain.
The financial sector was the hardest hit, with five out of the 11 sectors in the index showing negative movements. Bendigo and Adelaide Bank (ASX:BEN) faced the most significant loss, tumbling 16.5% to its worst performance ever after revealing a drop in its net interest margin for the first half. Westpac (ASX:WBC) followed closely, down 5%, after reporting a 9% drop in its first-quarter net profit to $1.7 billion. Other major banks also faced declines, with National Australia Bank (ASX:NAB) dropping 1.2%, ANZ (ASX:ANZ) losing 1%, and Commonwealth Bank (ASX:CBA) falling by 1%.
The downbeat sentiment also extended to the insurance sector, as concerns grew over potential regulatory changes. IAG (ASX:IAG) saw a drop of 3.2% following statements from Opposition Leader Peter Dutton threatening a breakup of the industry ahead of the upcoming federal election.
Gold mining stocks also faced significant sell-offs, prompted by a sharp decline in the price of gold. Northern Star Resources (ASX:NST) fell 4.1%, while Genesis Minerals (ASX:GMD) slid 4.6%, as the precious metal saw its largest one-day decline on Friday, amid expectations it had reached overbought levels.
However, the market was buoyed by strong performances in other sectors. BlueScope Steel (ASX:BSL) surged 11.3% after announcing an increase in its interim dividend to 30¢, driven by a 20% rise in steel prices in the US, spurred by tariffs imposed by President Donald Trump. The company's steel division generates about 45% of its earnings in the US.
Lendlease (ASX:LLC) reversed its earlier losses, rising 0.3%, despite reporting a mixed bag of results, with a drop in revenue but a profit turnaround to $39 million from a $173 million loss a year ago.
Other notable gainers included Star Entertainment (ASX:SGR), which saw a 10% increase after Oaktree agreed to refinance $650 million of its debt, and payment provider Findi (ASX:FND), which rallied 7.3% after narrowing its fiscal 2025 earnings guidance.
Despite the banking sector's troubles, companies outside of finance demonstrated strong resilience, showing that growth is still achievable in certain sectors of the Australian market.
