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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Westpac Banking Corp | ASX:WBC | Australian Stock Exchange | Ordinary Share |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.23 | 0.89% | 26.01 | 26.00 | 26.01 | 26.34 | 25.92 | 25.95 | 3,643,080 | 06:25:42 |
By Ross Kelly
SYDNEY--Australian stocks sank 1.7% on Tuesday after the central bank indicated a much-anticipated rate cut might not be imminent, worsening an already negative day of trading.
In its deepest single-day fall since May 6, the country's benchmark S&P/ASX 200 index fell 99.4 points to 5636, extending a 0.7% fall on Monday.
Stocks were already around 1% lower right before the Reserve Bank of Australia left interest rates unchanged as expected. But the central bank surprised the market by omitting any clear easing bias from its accompanying policy statement.
Many investors expect the RBA to cut rates again to stimulate the economy as a long mining boom fades, but Tuesday's statement revived speculation the rate-cutting cycle could be over. That strengthened the Australian dollar, while pushing the share market down.
"There's a broad anticipation that the Australian dollar should be lower and if we see any pickups, it provides an opportunity for overseas investors to sell into that strength," said Tony Russell, a Brisbane-based trader at Morgans.
The Australian stock exchange has undergone a bout of volatility in recent days as investors mull whether Greece can negotiate a solution to its debt woes, the U.S. economy can handle interest-rate increases expected later in the year, and the Australian economy can successfully transition away from a mining boom that continues to fade as China slows.
"The risks in global markets are simmering under the surface," said Evan Lucas, a Melbourne-based strategist at IG.
Shares of global mining giant BHP Billiton Ltd. (BHP.AU) fell 3% after Deutsche Bank downgraded its recommendation on the company's shares to a hold from buy, while Citigroup predicted the company would have limited scope for capital management until at least its 2018 financial year.
Iron-ore prices are currently hovering around US$60 a metric ton, with some investors fearful a recent recovery will be short-lived. "We believe the rally in iron-ore prices has peaked, as speculative positioning cools and fundamentals have deteriorated," Citigroup analysts said.
Rival mining company Rio Tinto Ltd. (RIO.AU) lost 1.6%, while banking stocks also struggled. Shares of Commonwealth Bank of Australia (CBA.AU) and Westpac Banking Corp. (WBC.AU) fell 1.8% and 2.4%, respectively.
Write to Ross Kelly at ross.kelly@wsj.com
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