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Australian shares experienced a nearly flat trading session on Tuesday, with gains in mining stocks offsetting losses in the financial sector. The S&P/ASX 200 index stood at 8,158.4 at the time of writing on 24 September 2024, reflecting a modest increase of 0.07% following a 0.7% decline the previous day.
Investors are keenly focused on the Reserve Bank of Australia (RBA) policy decision, anticipated later in the day. According to a Reuters poll, the central bank is expected to maintain its key interest rate at 4.35% for the foreseeable future. Jessica Amir, a market strategist at trading platform moomoo, noted that “rates are expected to hold steady as services prices, utility bills, housing costs, and rents continue to keep Australia's inflation among the highest in the world.”
Market participants are also awaiting the release of the August consumer price index report on Wednesday, which will provide further insights into inflation trends. In July, consumer prices eased to 3.5%, but remained above the RBA's target range of 2%-3%.
On the bourse, the mining sector enjoyed a strong session, with the sector gaining 1.6%. Major players such as BHP Group (ASX:BHP) rose by 1.5%, while Rio Tinto (ASX:RIO) saw a 1.4% increase. Conversely, interest-rate sensitive financial stocks took a hit, with the sector shedding 0.5%. All of the "Big Four" banks reported losses, reflecting broader concerns about the impact of interest rates on profitability.
Consumer staples were also under pressure, losing 1.8% overall. Coles (ASX:COL) dropped 2.4%, and Woolworths (ASX:WOW) declined by 2%, highlighting the ongoing challenges facing these retail giants amidst rising living costs.
Among individual stocks, American Rare Earths (ASX:ARR) surged by as much as 15.7% following U.S. backing for its Halleck Creek Project in Wyoming, signaling positive developments in the rare earths sector.
In currency markets, the Australian dollar strengthened slightly, trading 0.07% higher against the U.S. dollar at A$0.68.
Overnight in the U.S., major indices showed slight gains, with the Dow Jones Industrial Average rising 0.15%, the S&P 500 gaining 0.28%, and the Nasdaq climbing 0.14%. Meanwhile, in New Zealand, the benchmark S&P/NZX 50 index fell 0.3% to 12,400.97 at the time of writing.
As the day progresses, market participants remain on alert for any signs of policy shifts from the RBA and the upcoming inflation data, both of which could have significant implications for the Australian economy and its financial markets.
