The S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) has crashed back below the 5200 point mark, following a weak lead set by international markets overnight. The local bourse fell as much as 1.4%, wiping most of the gains achieved over the last two days.
Indeed, National Australia Bank Ltd. (ASX: NAB) is one of the primary reasons behind today's sharp fall. The country's third biggest bank by market capitalisation fell 4.6% to $28.55 after going ex-dividend, although it appears investors may also be becoming wary of the tighter net interest margins, or NIMs, being experienced across the major banks.
The NIM is used to measure a bank's level of profitability on the loans that it writes. All four banks have experienced tighter NIMs as a result of competition, with Commonwealth Bank of Australia (ASX: CBA) reporting a "slightly lower" group NIM this morning. The bank fell 1.6% while Australia and New Zealand Banking Group (ASX: ANZ) and Westpac Banking Corp (ASX: WBC) also fell 0.8% and 1.5%, respectively.
Elsewhere, the miners were also acting as a drag on the market's overall performance. BHP Billiton Limited (ASX: BHP) retreated 1.4% while Rio Tinto Limited (ASX: RIO) dropped 1.0%, with the gold miners falling even heavier. Newcrest Mining Limited (ASX: NCM) was down 3.4% while EVOLUTION FPO (ASX: EVN) lost 3.2% as gold prices continued to decline overnight.
It's also possible that comments from the Reserve Bank of Australia's governor, Glenn Stevens, are weighing on the market's performance. Stevens said that any change to interest rates in the near-term would almost certainly be further easing, not tightening, although he expressed confidence that such a move wouldn't be necessary.
That could be hurting the market's appetite for dividend stocks for now, although it's clear that interest rates will need to remain very low for the foreseeable future.
