QBE QBE Insurance Group Limited

   By Robb M. Stewart 
 

MELBOURNE--Shares in Australia were again under pressure Tuesday, closing at a fresh two-month low in the wake of Britain's vote to leave the European Union.

Markets globally remain jittery, with investors unsure how to position following the U.K. referendum. Still, the Australian market managed to pare back its worst levels of the day as major banks crept higher.

Surrendering a modest recovery Monday on the heels of Friday's steep dive, the S&P/ASX 200 shed 33.9 points, or 0.7%, to finish at 5103.3. Most industry sectors were in the red, led by energy and materials stocks.

"While the major implication for both the U.K. and Europe appears to be lower growth, the likely torturous process to leave the union could sabotage markets for weeks or months," said Michael McCarthy, chief market strategist at CMC Markets.

Investors continued to sell down shares of companies with sizeable exposure to the U.K., including the local stock of British bank CYBG, which was spun off by National Australia Bank in February. It fell another 0.7% to A$4.11 to bring its tumble over the last three sessions to 26%.

Asset managers BT Investment Management and Henderson Group also continued to be targeted, losing 1.7% and 1.3%, respectively. And QBE Insurance was knocked back another 1.6% to A$10.07, bringing the three-day retreat to 14%.

There was some relief for investment bank and asset manager Macquarie, which rebounded 1.4% to A$67.91 after strong selling the past two sessions.

And the country's largest banks notched gains, led by Westpac and National Australia Bank, which were both up 0.5%. Commonwealth Bank of Australia rose 0.4%, while Australia & New Zealand Banking nudged up 0.1%.

Morningstar in a note to clients said the big banks were well placed to manage increased risks from the U.K. vote, including being able to handle higher funding costs and increased volatility that has impacted financial markets.

Among energy stocks, Woodside Petroleum and Oil Search slipped 0.3% and 0.6%, respectively, and Santos dropped 2.6% to A$4.54 after oil prices had their largest back-to-back percentage losses since February in overnight trading.

BHP Billiton eased 0.3% to A$18.03, iron-ore miner Fortescue Metals Group declined 3.7% to A$3.40 and gold producer Newcrest Mining was 2.7% lower at A$23.55. Rio Tinto, meanwhile, was lifted 0.35 to A$44.20.

Write to Robb M. Stewart at robb.stewart@wsj.com

(END) Dow Jones Newswires

June 28, 2016 03:24 ET (07:24 GMT)

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