Miners suffer worst session in three weeks, shed 0.9%
RBA decision on Tuesday, jobs data due Thursday
Dec 8 (Reuters) – Australian shares ended slightly lower on Monday, with miners leading losses in a broadly subdued session, as investors treaded carefully ahead of the central bank’s rate decision and messaging on monetary policy trajectory.
The S&P/ASX 200 index fell 0.1% to 8,624.40 points. The benchmark rose 0.2% last week.
The Reserve Bank of Australia will meet on Tuesday, and with a rate hold seen as a given, focus will be on the central bank’s signals on the policy path.
Just a few weeks ago, markets were pricing at least one rate cut early next year. However, recent data showing firm domestic demand and job growth have reduced the case for further stimulus.
Instead, persistent inflation is expected to keep the RBA leaning hawkish, and markets fully imply the next move will be up, possibly as soon as May.
Traders are not expecting a particularly “rosy message” from the RBA, which has contributed to the underwhelming ASX performance, said Tim Waterer, chief market analyst at KCM Trade.
“The RBA could further dull the mood if they sound more alarmed about inflation risks,” Waterer added.
Investors also await local jobs data, due on Thursday.
Miners, which powered most of the benchmark’s gains last week, slipped 0.9%, logging their weakest session in three weeks.
BHP and Rio Tinto lost 0.8% and 0.9%, respectively, as tepid steel demand in China weighed on iron ore prices.
Gold stocks fell to a one-week low, shedding 1.7%. The sub-index has more than doubled in value year-to-date.
“Profit taking on gold stocks seemed a popular play today, ahead of event risk this week in the form of the Fed meeting,” Waterer said.
The U.S. Federal Reserve is expected to deliver a quarter-point rate cut on Wednesday.
Financial and real estate stocks added 0.2% and 0.3%, respectively.
New Zealand’s benchmark S&P/NZX 50 index ended nearly unchanged at 13,486.32 points.
(Reporting by Shruti Agarwal in Bengaluru; Editing by Eileen Soreng)
