Austalian shares slip as RBA decision looms, NAB posts profit miss

BHP

04/05/2026 07:52

Corrects typographical error in headline

AXJO falls 0.4%

Bank stocks log second straight session of losses

Lender NAB hits 8-month low on HY profit miss

Consumer staples fall 2.6%

ASX shares of a2 Milk plunge 9.8%

By Shruti  Agarwal

May 4 (Reuters) - Australian shares drifted lower on Monday ahead of the central bank's policy decision, while an earnings miss from top business lender NAB dented market sentiment.

The S&P/ASX 200 index .AXJO closed 0.4% lower at 8,697.10, after losing 0.7% last week.

NAB NAB.AX posted a miss in half-year cash earnings, warning of an uncertain asset-quality outlook as the Iran war ripples through the economy.

The lender's shares dropped 1.2% to their lowest since August 18, dragging financials .AXFJ 0.1% lower.

Three of the so-called big four banks have now raised provisions to account for potential losses linked to the Iran war.

These provisioning signals point to an early turn in the credit cycle, said Hebe Chen, market analyst at Vantage Markets, adding that credit cost normalisation and forward guidance will be central for upcoming bank results.

Investors are positioning cautiously ahead of the Reserve Bank of Australia's rate decision on Tuesday, Chen added, with a hike widely priced in.

If the RBA signals inflation is entrenched and keeps further tightening firmly on the table, equities face another round of repricing, she said.

Local shares of a2 Milk A2M.AX slumped 9.8% after the company announced a recall of three batches of an infant milk formula it sells in the U.S., after testing detected a toxin.

That drop, along with a 3.8% fall in Endeavour EDV.AX, which flagged higher fuel and freight costs, dragged the consumer staples index .AXSJ 2.6% lower.

Energy stocks .AXEJ fell 2.1%, as oil prices slipped after the U.S. said it will help free ships stranded in the Strait of Hormuz.

Miners .AXMM slid 0.3%, with Rio Tinto RIO.AX down 0.7%.

In other news, Australia and Japan beefed up cooperation around critical minerals amid a state visit by Japan's prime minister, with the countries providing A$1.67 billion in support for the sector.

In New Zealand, the benchmark S&P/NZX 50 index .NZ50 rose 0.4% to 13,097.68.

 (Reporting by Shruti Agarwal in Bengaluru; Editing by Ronojoy Mazumdar)

 ((Shruti.Agarwal@thomsonreuters.com;))