Mixed Sector Moves Hold ASX Steady Before RBA Rate Decision

Australian shares steadied in early Tuesday trade, hovering near 9,237 after two sessions of weakness. Traders kept a cautious stance ahead of the Reserve Bank’s policy decision later today, with consensus pointing to rates staying at 4.35% following three hikes this year aimed at cooling inflation amid global uncertainty. Attention also turned to July’s NAB business sentiment survey after June marked a four-month high. Offshore sentiment weighed, as U.S. futures eased after Wall Street losses overnight due to higher oil and tech sector drag. Logistics, consumer durables, tech, and industrial services fell, while energy minerals, non-energy minerals, and healthcare offered support. Standout gainers included Santos (4.1%), Woodside (2.6%), and CSL (1.5%). The big banks mostly slipped, down between 0.3% and 0.8%, with Westpac’s earnings disappointing. Other notable laggards were SGH Ltd. (-6.7%), CAR Group (-3.4%), and Qantas Airways (-2.2%).

The ASX 200 slipped 31 points, or 0.3%, to close at 9,233 on Monday, marking a second consecutive weakness as declines in financials, consumer durables, and industrial services weighed. Sentiment stayed cautious ahead of the Reserve Bank of Australia's monetary policy decision. While markets expect cash rates to remain at 4.35% after three hikes this year, inflation risks linger amid geopolitical uncertainty. Financials were hit hard by a 5.4% drop in Westpac after the lender flagged halved investor housing credit growth next year and a 20% slide in mortgage applications, alongside softer quarterly cash earnings of AUD 1.8 billion. Peers ANZ, Commonwealth Bank, and NAB also shed about 2%. Still, miners provided some offset, supported by firm metal prices, with BHP up 1.2% and Rio Tinto adding 0.6%. In the meantime, Treasury Wine Estates surged 4.8% after announcing plans to shrink its U.S. North Coast vintages from 2026 and write down bulk wine inventory.

Australian shares fell 45 points, or 0.5%, to 9,218 in early trading on Monday, extending losses for a second session as U.S. stock futures weakened amid growing doubts that the U.S. and Iran will soon reach a deal to reopen the Strait of Hormuz. Caution also lingered ahead of the Reserve Bank’s policy decision later this week, as sticky costs cloud the outlook despite three hikes so far this year. New data from main trading partner China added to the unease, with July inflation easing to a six-month low and producer prices rising the least in three months, underscoring soft demand. Financials led declines: the big four banks fell between 1.4% and 4.6% after Westpac’s soft Q3 earnings update. Insurers followed lower, with QBE (-2.3%), Insurance Australia (-2.5%) and AUB Group (-1.7%) among the laggards. Losses also spread to consumer durables, commercial services and logistics. Offsetting the weakness, BHP (1.1%), Northern Star Resources (1.8%) and Evolution (1.5%) posted solid gains.