Australian Shares Slip Ahead of RBA Rate Decision, Mining Stocks Drag Index Lower
Australian shares declined on Monday as losses in the banking and mining sectors outweighed gains in gold stocks ahead of the Reserve Bank of Australia’s (RBA) key interest rate announcement this week.
The S&P/ASX 200 index fell 0.5% to 8,303.3 as of 0033 GMT, reversing some of last Friday’s 0.6% gain.
RBA Rate Cut Widely Anticipated
Market consensus, according to a Reuters poll, expects the RBA to cut interest rates by 25 basis points to 3.85% on Tuesday. Easing inflation has given policymakers room to address increasing global economic risks.
However, investors are cautious as the central bank’s outlook will be closely watched amid reduced expectations for further cuts following a Sino-US tariff truce and strong Australian jobs data that helped ease recession fears. Swaps markets currently price in a nearly 98% chance of a rate cut at the upcoming meeting.
Sector Performance
-
Mining Sector: The mining index fell 1%, pressured by lower iron ore prices. Shares of major miners BHP, Rio Tinto, and Fortescue dropped 1.4%, 1.1%, and 1.5% respectively.
-
Financial Sector: Rate-sensitive financials dipped 0.4%, with National Australia Bank and Westpac both down 0.6%, and ANZ falling nearly 1%.
-
Energy Stocks: Lost 0.7% amid weakness in commodity prices.
-
Gold Stocks: Outperformed with a 1.5% rise, buoyed by gains in bullion prices. Northern Star Resources and Evolution Mining advanced 1.6% and 1.8% respectively.
Company News
New Hope Corporation saw a significant 5.7% decline, becoming one of the biggest losers on the ASX 200. The energy company reported a 27% drop in quarterly underlying EBITDA and lowered its fiscal year 2025 coal production and sales forecasts.
Regional and Global Markets
-
New Zealand’s S&P/NZX 50 index dropped 0.8% to 12,683.19.
-
Japan’s Nikkei fell 0.59% amid cautious global trade sentiment.
Investors worldwide remain focused on geopolitical developments and central bank decisions, which will likely continue to influence market direction in the coming days.
