Australian shares ease as investors look beyond likely RBA hike

Australian shares experienced a slight decline on Tuesday, with the S&P/ASX 200 index dropping 0.1% to 8,670.10 by 0033 GMT. This follows the broad expectation of an interest rate hike by the Reserve Bank of Australia (RBA) in September, prompting investors to look for indications of the central bank's monetary policy trajectory beyond that date.

The market has priced in a 25-basis-point increase in the cash rate to 4.60%, marking the fourth hike this year. Investors will closely examine the RBA's statement for insights into potential further tightening measures. Additionally, the upcoming August inflation data on Wednesday is expected to provide further context, as strong core inflation readings in July have heightened concerns about sustained price pressures.

Within the index, financials saw a 0.5% decline, with major banks experiencing losses ranging from 0.4% to 0.6%. Energy stocks also faced a 0.8% drop, hitting their lowest level since mid-August. Gold miners experienced a 0.5% decrease following a seven-week low in gold prices, while the broader mining sector saw a 0.4% rise. Real estate stocks and consumer staples experienced a 0.9% and 0.5% decline, respectively.

However, the market received some support from healthcare stocks, which rose 0.7%, reaching their highest level since mid-February. Technology stocks also surged, with some shares jumping as much as 4% after two consecutive days of declines, reaching their highest level in a week. Megaport's shares surged as much as 20.5% following the company's acquisition of three AI infrastructure contracts totaling A$978.6 million and an upgraded earnings forecast for 2027.

Codan also saw a significant increase of 17.9%, reaching a record high of A$61.30, after forecasting an annual net profit after tax of A$160 million, up from A$71.2 million the previous year. New Zealand's benchmark S&P/NZX 50 index also declined 0.5% to 13,755.90.

Brief written by urgent.news from Business Recorder's own syndicated text. Machine-written — may contain errors; check the original before relying on it.