The Australian share market retreated from its record highs on Monday, driven by concerns that the Reserve Bank of Australia (RBA) may delay the timing of its anticipated rate cuts into next year.
Investors are closely watching the central bank, which is expected to keep the cash rate on hold at 4.35% for the seventh consecutive meeting this week as inflation pressures remain "elevated".
The S&P/ASX 200 dropped 56.6 points or 0.7% to 8152.9 on Monday, pulling back from Friday’s record close of 8209.5. Global equities had surged last week following the U.S. Federal Reserve's surprise half-point rate cut, but local market sentiment has since cooled.
Losses were led by consumer-related stocks, with supermarket giants Woolworths and Coles both suffering heavy declines after the Australian Competition and Consumer Commission (ACCC) launched legal action. The ACCC alleges the retailers misled consumers with their discount claims on common products. Coles fell by 3.2%, while Woolworths dropped 3.4%, marking one of their worst trading days this year.
The mining sector also took a hit due to falling iron ore prices, sparked by renewed concerns over China's economic outlook. Industry leaders BHP and Rio Tinto both experienced declines, losing 1.3% and 0.6%, respectively.
Gold stocks were among the few gainers as the precious metal surged to a new high of $US2630.93 per ounce. Escalating tensions in the Middle East have fuelled demand for safe-haven assets, pushing gold prices up by 27% this year.
Gold miners Ramelius and West African Resources saw gains of 0.9% and 1.4%, respectively.
Uranium stocks also rallied, driven by news of Microsoft’s agreement to revive the U.S.-based Three Mile Island nuclear plant. The tech giant will purchase 100% of the plant's power for the next 20 years, a deal that boosted expectations for nuclear fuel demand.
Bannerman Energy soared 11.7%, Boss Energy rose 8.2%, and Paladin climbed 4.6%.
On the bond markets, 2-year and 10-year rates were at 3.964% and 3.612%, respectively.