Australian shares slip as miners weigh ahead of RBA rate decision

what happened

Australian shares slipped on Monday as losses in mining stocks outweighed gains in banks, with investors preparing for a possible fifth rate increase this year. The S&P/ASX 200 lost 0.2% to 8,894.10 by 2343 GMT, after climbing 1.3% the previous week. Miners dropped 1.5% as recent weakness in iron ore and copper hit heavyweights. BHP shed 1.3%, while Rio Tinto fell 1.4%, extending Friday's decline, after saying a seismic event briefly halted underground work at its Oyu Tolgoi copper mine in Mongolia. The gold sub-index sank 2.8% after bullion touched a one-year low in the prior session.

Financials rose 0.5%, with Westpac up 1% after reporting a slight increase in full-year profit on deposit and loan growth, even as mortgage demand cooled. Consumer staples slid 1.9%, with Coles and other major grocers down about 3%. New Zealand's S&P/NZX 50 fell 1.3% to 12,922.20.

why it matters

Rate expectations keep the mood cautious. After hawkish remarks from Governor Michele Bullock and inflation running above target, most economists now expect a hike to 4.85% at Tuesday's meeting, according to a Reuters poll in which only two of 32 respondents disagreed. Higher domestic borrowing costs would weigh on sentiment, and the tech sell-off on Wall Street adds to the caution.

market impact

Australian shares and miners: weak commodities and rate-hike bets press the market lower

• ▼ASX 200 pressure down — rate-hike expectations and weakness in mining companies
• ▼Iron ore pressure down — softer commodity prices weigh on BHP and Rio Tinto shares

instruments