Australia suffers wide losses when central bank keeps rate at 12-year high
The Australian share market continued to decline on Tuesday, after the central bank maintained the key policy rate in a 12-year-high level. This was done in order to maintain a restrictive policy until the core inflation rate is brought under control.
By 0352 GMT, the S&P/ASX 200 Index had fallen 0.4% to 8,131.4. The benchmark index was trading at a 0.3% decline ahead of the policy announcement. The benchmark closed Monday 0.6% higher.
In line with the poll, the Reserve Bank of Australia (RBA), kept its interest rate at the same level. It reiterated that restrictive policy was needed until core inflation decreased as desired.
The sticky core inflation figures released by Australia last week have also reinforced the expectation that the central banks, who lag behind their peers in initiating the monetary ease cycle, will delay further its cuts.
Australian banks fell 0.8% as investors booked profits. Commonwealth Bank of Australia, Australia's largest lender, fell 0.7% while Westpac lost 1.5%.
The energy sector shares have fallen 0.7% along with the banks, following a drop in oil prices worldwide. Sector giants Woodside and Santos traded at a 1.1% and 0.7% decline, respectively.
Investors are cautious about the U.S. Presidential Election, because Donald Trump and Kamalah Harris are virtually tied in the opinion polls before Tuesday's polls and the results may not be known until days after the polls close.
Miners have traded in the positive 0.4%. BHP, Rio Tinto, and Fortescue, the sector heavyweights, gained 0,7%, 0,9%, and 0.7% respectively.
The consumer staples sector, the reit and gold were also affected.
Domino's, the pizza maker, was the worst performer on the benchmark. Its shares fell to their lowest level in almost two months, after long-serving CEO Don Meij announced his decision to retire.
The benchmark S&P/NZX 50 Index in New Zealand was marginally higher. Reporting by Roushni Mukherjee and Rajasik Mukherjee from Bengaluru, editing by Alan Barona & Sumana Nandy
(source: Reuters)
