SYDNEY/WELLINGTON: Australian and New Zealand shares slipped on Wednesday with weaker iron ore, copper and oil prices dragging down Australia's heavyweight resources sector amid concerns about global demand.
The S&P/ASX 200 index fell 29.9 points to 5,490 by 01:20 GMT, pulling away from a two-month peak set on Monday.
Energy and basic materials suffered the most with 1 percent losses, while miners added to the pain. Spot iron ore prices dropped to their weakest level since 2009 on Tuesday as a supply glut keeps pressure on the commodity, which has fallen 42 percent this year.
Bluechips BHP Billiton Ltd and Rio Tinto gave up around 1 percent, while BC Iron tumbled nearly 7 percent to hit five-year lows at $0.900.
Financial sector stocks also weighed, even though Commonwealth Bank of Australia (CBA) posted a near 10 percent rise in first-quarter cash profits.
Three of Australia's major four banks, including CBA, have posted record profits in the recently-ended financial year although their results highlight future challenges in maintaining earnings momentum.
"Even CBA's strong result where we saw a 14 percent jump in first quarter earnings to A$2.3 billion did little to influence the downtrend," said Tristan K'Nell, head of trading at Quay Equities, seeing falling crude oil and iron ore as a major reason for the decline.
CBA shares shed 0.2 percent to $80.62, having touched a two-month peak of $81.10 Tuesday. National Australia Bank dropped nearly 1 percent.
Transfield Services Ltd, which runs the Australia's offshore refugee detention centres, had better luck after it upgraded earnings forecasts.
It rose 1.8 percent after it said it may still reach a buyout agreement with Spain's Ferrovial SA.
Shares of building materials maker CSR Ltd rose 1.4 percent, helped by the company reporting a 15 percent rise in its half-year revenues.
Next flash point is HSBC China Services PMI data due out later in the session.
Australia is sensitive to news out of China, the nation's top export market.
New Zealand's benchmark NZX50 index slipped 6.7 points or 0.1 percent to 5,416.51, hovering just below a lifetime closing high of 5,423.26 hit on Tuesday.
Outdoor clothing manufacturer Kathmandu was the biggest decliner in early trade, falling 1.87 percent to NZ$3.15, while materials maker Fletcher Building fell 1.2 percent to NZ48.54 Nuplex slipped 0.64 percent to a two-week low of NZ$3.11 after the resins and coatings manufacturer on Wednesday forecast 2015 earnings between NZ$115 million and NZ$125 million following the sale of some of its businesses, lower than NZ$125.7 million in the year just ended.
NZ Oil and Gas jumped 2.63 percent to a three-month high of $NZ0.78, extending gains as investors continued to buy up the oil and gas explorer and producer a day after it signalled plans to return capital to shareholders.
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