Australian shares muted as gains in miners offset bank losses; RBA decision in focus

Australian shares remained relatively unchanged on Tuesday as gains in mining and energy stocks were outweighed by losses in the banking sector. The S&P/ASX 200 index closed up 0.07%, sitting at 9,239.30 by 0030 GMT. On Monday, the benchmark had declined 0.3%. Mining stocks drove the upward trend, with metal prices increasing. BHP Group and Rio Tinto were among the major miners that rose 0.9% and 0.4%, respectively, while Fortescue gained 0.7%.

Gold miners also experienced a boost, jumping 1.9% due to higher gold prices. St Barbara experienced the largest gain at 3.4%, while Genesis Minerals increased by 1.1%. Energy stocks followed the upward trend, surging 3%, supported by the rise in oil prices. Woodside Energy and Santos led this sector, climbing 2.5% and 4%, respectively.

Financials, however, were the only sector to decline, falling 0.4%, with the "Big Four" banks decreasing between 0.2% and 0.5%. The focus of investors on Tuesday was the upcoming Reserve Bank of Australia (RBA) decision, which will be announced later in the day. Market expectations are that the central bank will maintain interest rates, with only a 3.9% chance of a rate hike.

This decision is being closely watched against the backdrop of economic growth slowing, inflation easing, and the housing market underperforming compared to the bank's expectations. The RBA has raised interest rates three times between February and May to combat persistent inflation, which has been exacerbated by geopolitical tensions, particularly the ongoing conflict in the Middle East.

In New Zealand, the S&P/NZX 50 index experienced a slight decrease of 0.2%, ending at 13,857.67. Meanwhile, attention will soon shift to Wednesday's critical meeting, called by New Zealand's Prime Minister Christopher Luxon amid discussions surrounding potential leadership changes.