Australian stocks rebounded to end the day almost unchanged after the Reserve Bank of Australia held rates steady and sounded less likely to hike rates soon, a relief to struggling consumer stocks. Banks and retailers which had all been trading lower leading up to the RBA's decision turned higher after the central bank commented on the slower pace of jobs growth, modest credit growth, soft housing prices, and cautious household spending.
"The statement was surprisingly more dovish than the market had expected, even though the market expected rates to remain on hold," said Simon Bonouvrie, portfolio manager at Platypus Asset Management. Investors had been selling banks and retailers on the view that the RBA would hike rates sooner rather than later, ahead of Tuesday's statement. "I think the potential for a rate rise has been pushed out to the back end of the year," said Bonouvrie. Among the big four banks, Westpac Banking Corp rose the most, ending the day up 0.8 percent. Top home lender Commonwealth Bank of Australia rose 0.1 percent.
The benchmark S&P/ASX 200 index lost just 2.8 points to close at 4,566.3, after touching a low of 4,531.6, but still notching up a fifth day of losses. New Zealand's benchmark NZX 50 index ended down 0.3 percent at 3,505.6.
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