Australia: Shares end lower as central bank disappoints

[BENGALURU] 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 per cent 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 per cent 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 per cent, with the "Big Four" lenders trading 0.2-0.9 per cent 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 per cent in their biggest single-day drop in two weeks, with Rio Tinto, BHP Group and Fortescue Metals shedding between 0.6 per cent and 1.6 per cent.

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

Tech stocks were the only bright spot, rising 4.4 per cent.

Afterpay extended gains for a second straight session, after the buy-now-pay-later firm received a US$29 billion buyout offer from Jack Dorsey-led Square on Monday.

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

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

REUTERS