Australian shares muted as gains in miners offset bank losses; RBA decision in focus

Australian shares were flat on Tuesday, as gains in mining and energy stocks were offset by weakness in banks, while investors awaited the Reserve Bank of Australia’s interest rate decision later in the day.

The S&P/ASX 200 index was up 0.07% at 9,239.30 by 0030 GMT.

The benchmark ended 0.3% lower on Monday.

Miners led gains on the benchmark, climbing 1.2% on the back of firmer metal prices.

Shares of mining majors BHP Group and Rio Tinto were up 0.9% and 0.4% respectively, while peer Fortescue added 0.7%.

Gold miners also advanced 1.9% aided by a strength in bullion prices.

St Barbara jumped 3.4%, while Genesis Minerals rose 1.1%.

Energy stocks followed, up 3%, helped by higher oil prices.

Shares of oil majors Woodside Energy and Santos advanced 2.5% and 4%, respectively.

Capping gains, Financials fell 0.4%, with the “Big Four” banks down between 0.2% and 0.5%.

Investor focus was firmly on the RBA’s policy decision due later in the day, with markets pricing a 96.1% chance that the central bank will leave rates unchanged and just a 3.9% probability of a hike.

The decision comes against a backdrop of slowing economic growth, easing inflation and a housing market that has underperformed against the central bank’s expectations.

The RBA has already raised rates three times between February and May to curb sticky inflation, fuelled in part by geopolitical tensions, particularly the Middle East conflict, that rattled global markets.

Austal surged 13.4% after the shipbuilder said it had received an offer from South Korea’s Hanwha Group to acquire its US operations for an indicative enterprise value of up to $1.20 billion.

In New Zealand, the benchmark S&P/NZX 50 index edged 0.2% lower to 13,857.67.

Meanwhile, attention will turn to Wednesday’s urgent meeting, called by Prime Minister Christopher Luxon amid leadership speculation.