The Australian sharemarket wiped out its morning gains and finished in the red, led lower by energy and financial stocks, after the Reserve Bank left interest rates on hold and sparked doubt about a cut at its next meeting on Melbourne Cup Day.
The S&P/ASX 200 closed down 14 points, or 0.2 per cent, at 8848.80. Nine of its 11 industry sectors declined, with energy the biggest drag on the index after oil prices tumbled overnight. The Australian dollar jumped 0.4 per cent to US66.01¢ after the rate decision.
Australian shares have declined after the RBA left interest rates unchanged. Credit: Louie Douvis
Financial shares weighed down the market, with the big four banks trading lower for most of the session. CBA, the nation’s biggest stock, fell 0.9 per cent, National Australia Bank shed 0.3 per cent, ANZ Bank lost 0.5 per cent and Westpac ended flat. While their moves were modest, they were among the strongest forces weighing on the local bourse because financial stocks make up more than a third of the ASX.
But it was the energy sector that had the biggest declines after oil slumped overnight on signals that OPEC+ will increase production again in November.
Gold miners climbed after bullion prices jumped another 2 per cent overnight to a record above $US3800 an ounce as precious metals surged, boosted by a weaker US dollar as investors weighed a potential US government shutdown. Northern Star Resources rose 1.2 per cent and Evolution Mining added 0.9 per cent.
The big iron ore mining heavyweights also advanced, limiting the market’s decline.
The RBA left official interest rates steady at 3.6 per cent after its two-day meeting, noting that while inflation had fallen substantially since its peak in 2022, there were signs the rate of decline was slowing. Rates have been cut three times this year, most recently in August. Markets hadn’t expected the bank to make another cut at this week’s meeting.
Read the entire market wrap here.