FX.co ★ Australian Shares Erase Earlier Gains

On Tuesday, the S&P/ASX 200 dipped by 0.2%, closing at 8,849, taking a step back from what was close to a two-week peak earlier in the day, thereby halting its three-day rally. This decline followed the Reserve Bank of Australia's latest monetary policy announcement, which maintained the cash rate at 3.60%, a decision in line with market expectations. The RBA highlighted ongoing inflationary pressures, with the August Consumer Price Index reaching 3%, its highest point since July 2024. Moreover, Q2 GDP demonstrated robust growth at 1.8%, the most rapid pace observed since September 2023. These circumstances allowed the RBA to preserve a tightening stance, warning that inflation could remain stubbornly high despite previous rate reductions. The central bank also observed indications of a rebound in private demand, reinforcing its choice to keep rates steady. Financial stocks underperformed, with Commonwealth Bank down by 0.9%, NAB and ANZ slipping 0.5%, and Westpac decreasing by 0.3%. Conversely, mining stocks led the market, as BHP climbed 2.3% and Rio Tinto advanced 2.1%.