Australia shares end flat as bank profit-taking caps mining gains
BHP soars 5.6%, best session in over 4 years
CBA sheds over 2%, down 6% from record high
GemLife jumps 4% on ASX debut
NZ50 slips, snaps 5-day rally
(Updates to market close)
July 3 (Reuters) - Australian shares closed little changed on Thursday, hovering near record highs, as profit-taking in banks offset a rotation into underpriced mining stocks.
The S&P/ASX 200 benchmark index finished at 8,595.80 points, 1.9 points below the previous day's all-time closing high.
Investors scooped up mining stocks, reliant on exports to top iron ore consumer China, which have significantly underperformed the benchmark and the financials sector over the past year.
The sub-index jumped over 3% on the day to hit a three-week high. BHP advanced 5.6% in its strongest session since January 2021, while Rio Tinto added 1.8%.
"It's too early to say whether there's a lasting rotation underway between the ASX's two biggest sectors, but right now, we see far better value in miners than in banks," said Lochlan Halloway, equity market strategist at Morningstar.
The sub-index has lost nearly 14% over the last two fiscal years.
Financials were the biggest drag on the benchmark, shedding over 1% in their weakest session in a week.
Commonwealth Bank of Australia dropped 2.2% on the day; now down more than 6% from last week's record high.
A 50% rally over the past two fiscal years, driven largely by inflows into CBA, has left investors cautious and eyeing a potential trigger for correction in banks and rotation into lagging sectors.
"After such a strong rally (in banks), it's understandable that some investors are choosing to lock in profits," Halloway said.
Elsewhere, discretionary consumer stocks fell 1.1%, while energy stocks rose 0.8%. Retirement resorts operator GemLife Communities advanced 4.1% in its market debut after Australia's biggest IPO this year.
In New Zealand, the benchmark S&P/NZX 50 index snapped a five-day winning streak to fall 0.6%, finishing at 12,704.48 points. (Reporting by Nikita Maria Jino in Bengaluru; Editing by Nivedita Bhattacharjee)
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