The Australian share market plunged nearly 2 per cent before lunch time on Friday following ANZ’s announcement of a $3 billion capital raising and a subsequent 7 per cent fall in shares.

The bank has already completed the main component of its venture, raising $2.5 billion from a share placement to institutional investors.

The bank’s shares were placed in a trading halt on Thursday ahead of its announcement of the share placement and a $500 million share purchase plan for ordinary shareholders, which together will lift its reserve levels to meet new regulatory requirements.

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ANZ shares resumed trade on Friday and were down $2.32, or 7.1 per cent, at $30.26 at 1215 AEST.

Shares in the three other major lenders also continued to fall after heavy losses caused by ANZ’s announcement on Thursday.

Westpac was down 98.5 cents, or 2.95 per cent, at $32.455, Commonwealth was down $2.01, or 2.4 per cent, at $82.54 and National Australia Bank was down 73 cents, or 2.2 per cent, at $32.86.

ANZ’s capital raising has investors expecting similar moves from its rivals, particularly CBA, while ANZ also issued a disappointing earnings update on Thursday.

Big miners and supermarkets also felt the impact as big banks weighed on the market.

– with AAP