The Australian share market has closed lower after the Reserve Bank stood pat on interest rates and delivered a more hawkish statement than expected on future rate cuts.
The benchmark S&P/ASX200 index on Tuesday closed lower for a second straight day, dropping 44.3 points, or 0.58 per cent, to 7,581.6.
The broader All Ordinaries fell 46.5 points, or 0.59 per cent, to 7,808.9.
In leaving rates unchanged, the Reserve Bank emphasised that inflation was still too high, that its board "remains highly attentive to inflation risks", and it could not rule out another rate hike.
Dr Dwyfor Evans, head of APAC macro strategy at State Street Global Markets, said it was a slightly more hawkish statement than anticipated, particularly after recent weakness in inflation data.
"Certainly not the neutral to dovish report that some would have anticipated after the most recent CPI report," he said.
IG market analyst Tony Sycamore said the statement led markets to push back the timing of the RBA's first rate cut from August to September, although he said he did expect an August rate cut.
The Australian dollar rebounded following the RBA's announcement, having earlier slipped below 65 US cents for the first time since mid-November.
Every sector except energy finished lower, with tech the biggest loser, falling 1.8 per cent as Xero dropped 2.8 per cent and Wisetech Global slipped 3.9 per cent.
In the heavyweight mining sector, Fortescue retreated 2.9 per cent to $28.05, BHP fell 1.1 per cent to $45.96 and Rio Tinto dipped 0.6 per cent to $128.41.
Also, West African Resources fell 10.6 per cent to a two-month low of 84c after disappointing with its 2024 production guidance at its Burkina Faso goldmine.
The interest rate-sensitive property sector fell 0.9 per cent lower, with Goodman Group down 1.3 per cent.
The big four banks were mixed, with CBA dropping 1.0 per cent to $114.37, Westpac dipping 0.1 per cent to $24.15 and NAB slipping 0.4 per cent to $32.20, while ANZ added 0.8 per cent to $27.43.
In the consumer discretionary sector, two well-known retailers posted double-digit gains on trading updates.
Myer advanced 14.3 per cent to an eight-month high of 76c after the department store chain announced its same-store sales were up 0.1 per cent in the 26 weeks to January 27, compared with the same time a year ago.
Chief executive John King said it was an encouraging result given the current economic environment.
Nick Scali jumped 16.6 per cent to a one-year high of $14 after the furniture retailer announced a $43 million profit in the half-year to December 31, down 29 per cent from a year ago but slightly ahead of guidance.
Revenue was down 20.2 per cent to $226.6 million, but sales have shown signs of rebounding in the past three months.
The announcements apparently bolstered others in the sector, with Adairs rising 5.5 per cent, Harvey Norman climbing 2.3 per cent and Kogan adding 3.8 per cent.
Late Tuesday afternoon the Aussie was buying 65.13 US cents, from 65.10 US cents at Monday's ASX close.
ON THE ASX:
* The benchmark S&P/ASX200 index finished Tuesday down 44.3 points, or 0.58 per cent, to 7,581.6.
* The broader All Ordinaries dropped 46.5 points, or 0.59 per cent, to 7,808.9
CURRENCY SNAPSHOT:
One Australian dollar buys:
* 65.08 US cents, from 65.10 US cents at Monday's ASX close
* 96.57 Japanese yen, from 96.61 yen
* 60.54 Euro cents, from 60.40 Euro cents
* 51.86 British pence, from 51.63 pence
* 107.22 NZ cents, from 107.19 NZ cents.
