The ASX 200 index gained 13 points during the day and ended at 7,236. It was pushed higher by the RBA announcement but dragged down by mining companies.
The Australian market started the early trade on Tuesday hanging between the end of interest rate hikes from the Reserve Bank of Australia (RBA) and another increase for the 11th time.
Later on, the RBA paused the interest rate at 3.6% after 10 consecutive increases since May 2022. The RBA stated that it will observe and track the impact of previous hikes, but further hikes are still possible in the time ahead.
Australia’s inflation numbers for February were down to 6.8%, as compared to the high point of 8.4% in December 2022. The bank is forecasting this number to further decline this year and in 2024.
Philip Lowe, the governor of the RBA, made a statement, “The decision to hold interest rates steady this month provides the Board with more time to assess the state of the economy and the outlook, in an environment of considerable uncertainty.”
Homeowners and small businesses have welcomed this news and expecting temporary relief after struggling with higher rates in the last year.
Banking stocks traded mixed on Tuesday following the RBA announcement. The Commonwealth Bank of Australia (AU:CBA) was down 0.29%, and Westpac Banking Corp. (AU:WBC) fell 0.41%. On the other hand, ANZ Group Holdings (AU:ANZ) and National Australia Bank Ltd. (AU:NAB) were up 0.22% and 0.57%, respectively.
In separate news, energy stocks jumped after OPEC (Organization of the Petroleum Exporting Countries) cut oil production by 1.16 million barrels per day. The brent crude oil benchmark jumped 5% to $84.17 per barrel after the OPEC announcement.
The news drove the ASX energy index higher, with major oil companies posting gains.
The materials sector saw the biggest decline on Tuesday. Mining giant BHP Group Limited (AU:BHP) lost 2.19% in continuation of its volatile share price since last month. Rio Tinto Limited (AU:RIO) was down 0.89%.