Australian stocks: Big banks drag sharemarket down

MELBOURNE - The Australian sharemarket eased downwards with the banks and financial services stocks weaker.

The market fell despite a strong lead from Wall Street and a drop in the oil price, but ABN Amro client adviser Bill Bishop said the local bourse was still "undeniably strong".

"There has been a mild levelling off but that doesn't in any way detract from the overall solidness of the market," he said.

"It is powered by a number of things but there is an ocean of cash from all these share buybacks."

At the close of trade the benchmark S&P/ASX200 was 7.8 points lower at 4263. Overnight in the US, Wall Street shook off its pessimism about profit growth as crude oil prices fell and consumer confidence jumped to a three-year high.

The Dow Jones industrial average rose 114.85 points to 10,405.63 and the Standard & Poor's 500 Index gained 10.88 points to 1201.57.

After a strong showing on Tuesday, all of the big banks were down with the Commonwealth Bank slipping 20Ac to A$37.55, National Australia Bank falling 17Ac to A$30.70 and ANZ dropping 11Ac to A$21.75.

Westpac eased 3Ac to A$19.70 despite a research report forecasting that the bank could make a capital return of as much as A$700 million in coming months.

As the oil price eased back from record levels energy stocks fell with Woodside down 33Ac to A$28.92 and Santos backtracking 12Ac to A$11.22.

Health care stocks were strong again apart from CSL which fell 73c to A$33.86 after Tuesday's strong gains.

Resmed was up 42Ac to A$8.52 and biopharmaceutical company Apollo Life Sciences was 27Ac or 54 per cent richer on 77Ac after its first day of trading.

West Australian winemaker Evans & Tate lifted 9Ac, or 29.03 per cent, to 40Ac despite announcing it was going to write down the value of its inventory.

- AAP