Miners and Banks Drive Down Australian Equities; This Week’s RBA Decision
Ahead of the Reserve Bank of Australia’s (RBA) interest rate announcement this week, Australian markets slumped on Monday, with bank and mining firms suffering the most.
As of 2341 GMT, the S&P/ASX 200 index is down 1.4% to 7,783.2 points during the previous week. The benchmark is expected to finish the month 2.3% down, marking the second straight month of declines. A Reuters survey of economists predicts that the RBA will maintain its interest rate at its current level on Tuesday.
As they wait for more convincing evidence of lowering inflation, policymakers have minimized the likelihood of more rate reduction. Last month, the RBA dropped interest rates for the first time in more than four years. Meanwhile, analysts still anticipate two rate cuts this year, with the next one scheduled for May.
Following a drop in the price of iron ore, miners slid 2% to their lowest level in two weeks. The mining behemoths Rio Tinto, Fortescue, and BHP had losses ranging from 2.2% to 2.3%.
The “Big Four” banks fell between 1.5% and 2%, while heavyweight banks followed with a 1.6% decrease. Following a four-session rise, gold stocks fell 1.1%. Evolution Mining had a 0.7% decline, while Northern Star Resources saw a 0.5% decline.
After rising for four straight sessions, energy stocks slumped 1.3% as oil prices declined due to concerns that the U.S. tariff conflicts would cause a worldwide recession. Amidst corporate news, ASX shares saw a 1.9% decline.
The bourse operator has been directed by the Australian securities regulator to launch an independent investigation into the clearing platform’s failure. With a 0.3% decline, New Zealand’s benchmark S&P/NZX 50 index was on track to lose for the third consecutive session.
After being criticized for being overly strict and lowering competitiveness in the industry, the Reserve Bank of New Zealand announced on Monday that it will examine bank capital requirements this year.
