A SURPRISE plunge in the level of housing finance added to the gloom surrounding the banking sector yesterday, sending shares in major lenders sharply lower and contributing to the share market’s fifth straight day in the red.
Shares on the Australian Securities Exchange sank almost 2 per cent, extending its losing streak and further undermining recent optimism that saw the market hit a 5-week high last week.
The benchmark S&P/ASX200 index slipped 96.9 points or 1.78 per cent to close at 5342.4 points yesterday, while the broader All Ordinaries index lost 94.3 points or 1.71 per cent to 5410.9.
The two biggest sectors in the market - banking and resources - dragged the bourse lower, after news of the biggest plunge in housing finance levels in four years and more gloomy signals on the US and global economies.
The number of housing finance commitments in February fell by 5.9 per cent, the largest slide since January 2004, fuelling concerns bank revenue will suffer from selling fewer loans. Westpac also announced it was cutting commissions paid to mortgage brokers, implying it was pulling back from the home loan market.
ANZ was again the worst performer in the sector, its shares down 2.34 per cent as it continued to reel from its involvement in the Opes Prime collapse. ANZ shares have dropped 13 per cent since April 7, when it said it had set aside almost $1 billion for bad debts.
EL&C Baillieu Stockbroking head of …
