PERTH: The Australian sharemarket endured a third straight day of mixed trading, ending slightly down as materials and energy stocks took the gloss off broader gains inspired by soft inflation data which opened the door to monetary policy easing.
At the 4.15pm (AEDT) official market close, the benchmark S&P/ASX200 index was down 11 points, or 0.21 per cent, to 5335.2, while the broader All Ordinaries fell 10.2 points, or 0.19 per cent, to 5374.4.
Australia’s inflation came in below expectations for the third quarter, steady at an annual 1.5 per cent, but below the consensus of a 1.7 per cent print. The Australian benchmark immediately picked up about 16 points upon the 11.30 (AEST) announcement.
IG market analyst Angus Nicholson said the bond market pricing for a Melbourne Cup Day rate cut by the Reserve Bank of Australia had risen to 61 per cent from 30 per cent after the announcement. The underlying inflation rate declined from an annual 2.2 per cent to 2.1 per cent against expectations of a lift to 2.4 per cent.
“Earlier this year we saw Australia’s unemployment rate blow out to 6.3 per cent and the RBA were happy to look through this, and the big question is whether the RBA will be prepared to look through this again,” Mr Nicholson said.
“Even though there does seem compelling reasons for the RBA to cut rates, the Glenn Stevens’ RBA is not one to move early or be pressured by the market.”
The Australian dollar slumped after the initial announcement before recovering slightly.
Elsewhere, the big banks were in the news — and drove early selling — as NAB reported a less-than-expected profit number. Westpac was reported to be considering the sell-off off its infrastructure funds manager Hastings. CBA, meanwhile, bore criticism for its efforts to compensate victims of the financial advice scandal.
