Australian shares slipped on Tuesday, dragged by energy and mining stocks, with investors retreating to the sidelines ahead of the central bank’s expected interest rate cut later in the day.
The S&P/ASX 200 index fell 0.3% to 8,565.3, as of 0029 GMT.
The benchmark fell after hovering near the 8,600 mark since July 2 till the previous session, as traders focused on the looming tariff showdown.
US President Donald Trump issued the first in a series of tariff warning letters, saying that the reciprocal levies will take effect from August 1.
Australia faces a 10% baseline tariff. Meanwhile, the Reserve Bank of Australia is set to announce its closely watched interest rate decision later in the day.
The RBA is widely expected to deliver a 25-basis-point cut - its third since the first was announced at its February meeting.
“Anything different from a rate cut or a hawkish tone has the potential to generate increased volatility,” analysts at ANZ said.
“Overall, market volatility is expected to remain elevated this week, with US trade policy the dominant global concern,” analysts at trading platform Moomoo said.
The mining sub-index shed 0.7%, tracking a fall in iron ore prices.
Shares of the world’s biggest listed miner BHP were down 2.3%, while Rio Tinto and Fortescue lost 2.2% and 1.8%, respectively.
Energy stocks dropped 0.2% and rate-sensitive financial stocks declined 0.1%. Bucking the broader trend, gold stocks advanced by 2.7%.
“Investors are increasingly seeking refuge in safe-haven assets, with gold beginning to recover recent losses,” analysts at Moomoo said.
Meanwhile, New Zealand’s benchmark S&P/NZX 50 index fell 0.3% to 12,723.52.
The Reserve Bank of New Zealand is due to announce its monetary policy stance on Wednesday, with economists in a Reuters poll pointing towards a hold from the central bank.
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