Australia: Shares end lower as virus woes offset central bank support

[BENGALURU] Australian shares closed lower on Tuesday, as concerns over rising Covid-19 cases in Victoria overshadowed optimism about the country's central bank reiterating its accommodative policy stance.

The S&P/ASX 200 benchmark index closed 0.3 per cent lower at 7,142.6, after ending down 0.3 per cent in the previous session.

Melbourne, the capital of Australia's second most populous state Victoria, is battling fresh infections, with the country reporting nine new locally acquired cases on Monday.

The Reserve Bank of Australia (RBA) held its cash rate at record low of 0.1 per cent for a sixth straight meeting and reiterated its outlook that rates could remain there until 2024.

The Australian dollar slipped from a one-week high hit earlier, as some market participants were expecting a hawkish tilt in the statement.

"With policy accommodation front-loaded, fiscal policy stimulus on the generous side and the economy on a steady mend, the RBA has no reason to accentuate its dovish stance," Mizuho Bank said in a note.

Australian home prices surged in May, while approvals to build new houses reached record highs, adding yet another challenge for the RBA, which wants to keep rates low until inflation revives.

Financials ended 0.7 per cent lower and were the worst-hit sectors on the benchmark, with all the "Big Four" banks closing in the red.

Energy stocks rebounded after falling 1.6 per cent on Monday and were the top performers on the index, boosted by higher oil prices.

Multi-media firm Nine Entertainment jumped as much as 4.7 per cent after it signed multi-year content supply deals with Google and Facebook. The stock, however, ended 0.7 per cent higher.

Across the Tasman Sea, New Zealand's benchmark S&P/NZX 50 closed up 1.2 per cent at 12,462.47.

China-focused baby food makers Synlait Milk and a2 Milk were among the top gainers, after Beijing relaxed the cap to allow married couples to have up to three children from the existing limit of two.

REUTERS