(AUSTRALIA) – Despite some volatility in mining companies, the Reserve Bank of Australia’s decision to hold interest rates steady failed to ignite much enthusiasm in the share market, resulting in a lackluster trading session.
The benchmark S&P/ASX 200 ended the session with a minor decline of 4.5 points, closing at 7,314.3, while the All Ordinaries finished down 0.1 percent.
During Philip Lowe’s final meeting as governor, the central bank decided to maintain the cash rate at 4.1 percent for the third consecutive month.
However, the bank has maintained a hawkish stance, indicating that further monetary tightening may still be necessary.
EY Economist: Cash rate likely to stay at 4.1%
EY’s chief economist, Cherelle Murphy, suggested that after three months of no rate changes, the cash rate may remain at 4.1 percent for the foreseeable future.
She added that the Reserve Bank has not ruled out further tightening but noted that additional rate hikes appear increasingly unnecessary as the economy aligns with the central bank’s expectations.
The RBA expressed concern about the outlook for the Chinese economy, among other uncertainties, due to ongoing pressures in China’s property market.
This came after China’s Caixin services purchasing managers index revealed that activity in the private services sector had expanded at its slowest pace since December.
On the ASX 200, utility stocks were the only sector to move more than 1 percent in either direction, falling 1.2 percent as heavyweight Origin Energy declined by 2.9 percent.
Origin Energy initiated talks with the NSW government to extend the life of its Eraring Power Station, which is slated to close in 2025.
In other corporate news, Qantas shares dipped 0.2 percent after outgoing CEO Alan Joyce advanced his retirement by two months. Joyce’s retirement led to Vanessa Hudson taking over as group CEO and managing director.
In the mining sector, Chalice Mining fell 13.4 percent after being downgraded to “underperform” by Jefferies analysts, and Tietto Minerals dropped 20.4 percent due to a downgrade in gold production guidance.
Copper producer Sandfire Resources also slid 4.1 percent after a UBS downgrade.
On a positive note, small-cap Torque Metals surged more than 170 percent after expanding its Paris Gold Camp, while Orora announced plans to acquire French glass bottle maker Saverglass for approximately $2.2 billion.
Graincorp shares bounced 3 percent following the Australian government’s reduced wheat crop estimates.
Economists have raised their second-quarter GDP growth forecasts ahead of the official figures set to be released soon, with National Australia Bank and Commonwealth Bank predicting a 0.5 percent quarterly GDP rise, while ANZ and Westpac forecast a 0.4 percent quarterly increase.
