The Australian share market ended virtually unchanged on Tuesday after the Reserve Bank of Australia (RBA) surprised investors, holding the official cash rate at 3.85%, contrary to expectations of a 25-basis point cut.
The benchmark S&P/ASX 200 Index edged up slightly, closing just 1.40 points higher at 8,590.7, with seven out of the 11 sectors finishing in negative territory.
Consumer Staples was the weakest sector on the day, with major stocks including Woolworths, Coles, and Metcash retreating 1.3%, 1.4%, and 1.7%, respectively.
Utilities also dragged the market lower, as shares in Origin Energy, Infratil, and AGL Energy all recorded losses.
The RBA’s monetary policy decision was the primary focus of the session. In a split 6 - 3 vote, the central bank board chose to leave the cash rate unchanged at 3.85%.
While inflation has moderated towards the RBA’s 2 - 3% target range, policymakers opted to wait for more conclusive evidence that inflation is sustainably heading to 2.5%.
The RBA also acknowledged ongoing uncertainties, both globally and domestically. Key risks include volatile global trade policy, particularly from the United States, and a slower-than-expected recovery in private demand.
In economic data, the NAB Monthly Business Survey showed further signs of improvement in sentiment and operating conditions.
Business confidence rose for a third straight month to +5 index points, its highest trend level in over a year. while conditions improved across most industries, with notable increases in manufacturing and retail.
Among notable corporate movers, Botanix Pharmaceuticals tanked 53.2% after the U.S.-based dermatology firm issued an update on the commercial launch of Sofdra, its FDA-approved treatment for primary axillary hyperhidrosis, commonly known as excessive underarm sweating.
Meanwhile, shares in DigitalX surged 34.2% following the announcement of a $20.7 million strategic capital raise. The digital asset investment firm secured backing from prominent industry players, including Animoca Brands, UTXO Management, and ParaFi Capital.
On the bond markets, yields moved sharply higher following the RBA’s decision. The Australian 10-year bond yield rose by 1.1% to 4.275%, while the 2-year yield climbed 2.3% to 3.356%.
