Australia shares end lower as c.bank disappoints; miners, energy stocks weigh

RBA decision on tapering bond-buying stands

  
An ibis bird perches next to the Reserve Bank of Australia headquarters in central Sydney, Australia February 6, 2018. REUTERS/Daniel Munoz

An ibis bird perches next to the Reserve Bank of Australia headquarters in central Sydney, Australia February 6, 2018. REUTERS/Daniel Munoz

Daniel Munoz

Australian shares dropped on Tuesday, with miners and energy stocks leading declines, as the country's central bank stuck to its words to cut back stimulus even as heavily-populated states remained under lockdowns.

The S&P/ASX 200 index fell 0.2% to end at 7,474.5, slipping from Monday's record closing high.

In a surprise move, the Reserve Bank of Australia (RBA) said it would continue to taper its bond-buying programme from September and stood pat on the cash rate at 0.1% for its eighth straight policy meeting.

"Markets will be a little disappointed (at the asset tapering decision)," said Henry Jennings, senior analyst at the Marcustoday Financial Newsletter. 

"I think we were pressing on hopes that they might back up a little bit given the lockdowns...It's a bit negative for the banks, it means the interest rates are going to be pretty much where they are for a long time."

Banking stocks fell 0.5%, with the "Big Four" lenders trading 0.2%-0.9% lower.

Mining and energy stocks took a beating on weaker commodity prices, as base metals and oil fell on coronavirus woes that could slow demand and hinder recovery.

Miners were the biggest laggards, shedding nearly 1% in their biggest single-day drop in two weeks, with Rio Tinto, BHP Group and Fortescue Metals shedding between 0.6% and 1.6%.

The energy sub-index lost about 1.4%, dragged down by Whitehaven Coal Ltd and Beach Energy Ltd.

Tech stocks were the only bright spot, rising 4.4%. Afterpay extended gains for a second straight session, after the buy-now-pay-later firm received a $29 billion buyout offer from Jack Dorsey-led Square Inc on Monday.

In New Zealand, the benchmark NZX 50 index fell 0.02% to 12,700.5, with freight gateway operator Port of Tauranga Ltd losing 2.5%.

Japan's Nikkei was down 0.5%, while the S&P 500 E-minis futures were up 0.3%.

(Reporting by Yamini C S in Bengaluru; Editing by Rashmi Aich) ((Yamini.CS@thomsonreuters.com;))


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