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Australia shares dip as banks drag; eyes on U.S. Fed meeting

Published 15/09/2020, 05:23 pm
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* "Big Four" banks drop up to 1.9%

* Gold stocks jump to their highest in nearly a month

* Poll shows NZ set to officially enter recession (Updates to close)

By Deepali Saxena

Sept 15 (Reuters) - Australian shares ended nearly flat on Tuesday, weighed by banking stocks as minutes from the central bank's recent policy meeting did not provide a clearer direction on further policy measures.

The ASX 200 index .AXJO ended 0.08% lower at 5,894.8, with the "Big Four" banks falling between 1.4% and 1.9%. Heavyweights CSL Ltd CSL.AX and BHP Group BHP.AX helped offset banks' losses, while gold stocks .AXGD climbed nearly 4%.

The Reserve Bank of Australia will maintain its "highly accommodative settings" and will continue to consider how further policy measures could support the country's flagging economy, minutes of the September meeting showed. don't think there was anything material in any of the minutes that would give any sort of direction... anything that isn't already priced into the market", said Brad Smoling, managing director at Smoling Stockbroking.

Leading up to the release, markets had been pricing a rate cut at the upcoming October meeting, but the highly anticipated minutes did not indicate any policy action was imminent.

"We see a lower probability of a rate cut, given Lowe saw 'not much benefit'; but we can't rule it out," economists at UBS wrote in a note.

Smoling also said investors will turn to the U.S. Federal Reserve's two-day meeting that starts later in the day for further directions.

Shares of buy-now-pay-later (BNPL) firms halted their slide, with U.S.-based Sezzle Inc SZL.AX snapping a five-day losing streak. Afterpay APT.AX closed 3.4% higher. New Zealand, the benchmark S&P/NZX 50 index .NZ50 ended 0.2% lower at 11,770.75.

Local shares of Westpac Banking Corp WBC.NZ shed 0.9% and Australia and New Zealand Banking Group ANZ.NZ dropped to a more than one-month low.

Eyes are on the country's second-quarter economic data due on Thursday, with a Reuters poll showing that it is set to record the sharpest quarterly contraction and officially enter recession.

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