Australian shares closed lower on Tuesday, weighed down by tech stocks and as the country’s central bank decided to scale back its bond-buying programme at a policy meeting.
The S&P/ASX 200 index reversed morning gains to close 0.7 percent lower at 7,261.8 points, its lowest level in a week. However, the rise in oil prices boosted Australia’s energy sub-index, which rose to 1.6% after hitting a near 3-week high on Tuesday.
The Reserve Bank of Australia held the cash rate at 0.1%, as widely expected, at its July policy meeting on Tuesday, citing ongoing virus outbreaks as a key near-term uncertainty.
“It’s inflation on trade today, with the rising oil prices threatening recovery. The US Federal Reserve may be forced to raise rates, which is very concerning” Brad Smoling at Smoling Stockbroking said.
Oil Search Ltd closed up 4.62 percent, making it the biggest gainer on the benchmark, followed by Whitehaven Coal, Australia’s largest independent coal miner, which gained 3.9 percent.
Ministers from the Organization of Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, cancelled oil output talks, raising fears that supplies will tighten further. The tech stocks fell 1.8%, weighing on the benchmark, led by Appen Ltd, which fell 6.2%, and Megaport Ltd, which fell 3.5%. The big four banks fell between 0.2 percent and 0.6 percent, while the financial sub-index fell 0.42 percent. The benchmark S&P/NZX 50 index in New Zealand fell 0.4% to 12,758.9.