Australian stocks retreated 0.3 percent on Tuesday, with sentiment turning negative after the Reserve Bank of Australia lowered its economic growth forecasts for the near term, though volume was light. The RBA kept the cash rate unchanged at 4.75 percent and warned that near term growth is unlikely to be as strong as expected as households remain cautious, several sectors struggle and world economic growth had also slowed.
Banks and retailers led the way down in afternoon trade, with top lender Commonwealth Bank off 0.5 percent and National Australia Bank losing 1.1 percent. Not even the prospect of steady interest rates could revive the discretionary retail sector, as department store chain Myer extended its downward slide on the poor prospects for retail demand, losing 2.3 percent to a fresh all-time-low of A$2.52.
Electricals retailer Harvey Norman lost 0.4 percent and upmarket department store David Jones slipped 0.8 percent. The benchmark S&P/ASX 200 index eased 12.6 points to 4,598.1, after trading as high as 4,626. The index rose 0.4 percent on Monday. Turnover was light at around 65 percent of average. New Zealand's benchmark NZX 50 index ended down 0.1 percent at 3,473.6.
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