The Australian sharemarket retreated on Tuesday after the Reserve Bank of Australia (RBA) opted to keep interest rates unchanged at 3.6%, citing a persistent mismatch between supply and demand following last week’s stronger-than-expected inflation data.
The S&P/ASX 200 fell 81.1 points, or 0.9%, to close at 8,813.7, trading at the lowest levels since 1 October, with 10 of 11 sectors ending in negative territory.
Trading volumes were thin due to the Melbourne Cup public holiday in Victoria, limiting market activity and corporate updates.
RBA Governor Michele Bullock acknowledged that inflation remained higher than desired but said it was still trending lower over time. “We know the monthly numbers are volatile. What we’re doing is we’re looking at the forward indicators, and that’s things like vacancies are pretty elevated. Still, the quits rate has jumped,” she said at a post-meeting press conference.
Utilities stocks were among the biggest drags on the index, with Origin Energy down 3.7% and AGL Energy off 3.8% after the government announced a new plan to offer households - including those without solar panels - at least three hours of free solar power per day under an energy-saving initiative set to launch in 2026.
Energy Minister Chris Bowen said the programme aims to reduce electricity costs and boost renewable energy adoption.
Materials also weighed heavily on the market as iron ore futures slipped 1.4%.
Rio Tinto dropped 2.6%, BHP slid 1.9%, and Fortescue Metals fell 2.7%.
Technology shares were mixed after gains on Wall Street, where Amazon and other AI-related stocks lifted the Nasdaq.
WiseTech Global lost 1.5%, Xero dipped 1.6%, and Life360 declined 1.2%, while Block shed 2.8%.
Novonix also plunged 10.6% after announcing that FCA US, a subsidiary of Stellantis, had terminated a major offtake agreement effective immediately.
Meanwhile, City Chic surged 8.8% as the retailer reported continued positive momentum during the first 18 weeks of fiscal 2026.
Southern Cross Media gained 3.6% after independent adviser Kroll backed its proposed merger with Seven West Media, calling the deal “fair and reasonable” and in the best interests of shareholders.
Seven West was unchanged at $0.14.
Light & Wonder advanced 1.3% after filing documents with U.S. regulators to delist from the Nasdaq, paving the way to operate solely as an ASX-listed company.
On the bond markets, yields edged higher, with the 10-year and 2-year government bond rates up 0.2% and 0.4% respectively, to 4.355% and 3.621%.
