Slight Decline in Australian Stocks Ahead of Central Bank Decision and Approaching U.S. Tariff Deadline

SadaNews - Australian stocks experienced a slight decline at the start of the week today, Monday, amid pressures from mining and banking stocks, as investors remained cautious ahead of the Australian Reserve Bank's meeting regarding interest rates and the expiration of the U.S. tariff suspension deadline.

The “S&P/ASX 200” index closed down by 0.2 percent at 8,589.30 points, after gaining 1 percent last week.

Investors are awaiting two major events this week; the Reserve Bank of Australia's meeting tomorrow, Tuesday, during which it is expected to announce a 25 basis point cut, and the expiration of the tariff suspension period imposed by U.S. President Donald Trump on Wednesday.

The index fluctuated around the 8,600 point level, while banking stocks have declined since the beginning of the month, due to profit-taking after strong rises since April, supported by expectations of a rate cut.

Luke Winchester, portfolio manager at “Merodher Capital,” stated that traders may be taking hedging positions as the Australian central bank meeting approaches.

He explained that “momentum at the index level has stalled, after the Commonwealth Bank's share fell about 7 percent from its peak recorded on June 25, which is pressuring the index as it has the largest relative weight of over 12 percent.”

The Commonwealth Bank, Australia's largest lender and largest company listed by market capitalization, had surpassed the 300 billion Australian dollar mark in value on June 4.

The financial sector index declined by 0.2 percent during the session, with the Commonwealth Bank's share decreasing by 0.1 percent.

Mining company shares also closed down by 1.1 percent, with “BHP” shares falling by 0.3 percent, and “Rio Tinto” by 0.2 percent, while “Fortescue” shares rose slightly.

Energy sector stocks dropped by 0.2 percent, and gold stocks fell by 3.7 percent to their lowest level in about two months.

In contrast, the healthcare sector reduced market losses, with its shares rising by 0.9 percent to their highest level in four months, supported by a 2.2 percent increase in the shares of pharmaceutical company “CSL.”

In New Zealand, the “S&P/NZX 50” index ended trading with little change, amid expectations that the central bank there will keep interest rates unchanged on Wednesday.

Source: Reuters