By Oliver Gray
Investing.com - The S&P/ASX 200 lost 49.70 points or 0.67% to 7,420.40 during Tuesday’s session, extending losses of 0.36% in the previous session and retreating from early gains as the Reserve Bank of Australia flagged a greater uncertainty surrounding its inflation outlook as policymakers acknowledged that unexpectedly high global inflation and a stronger-than expected economic recovery could force rate hikes earlier than 2024.
Among stocks, Rio Tinto Ltd (ASX:RIO) was down 2.09%, BHP Billiton Ltd (ASX:BHP) fell 2.91%, Pendal Group Ltd (ASX:PDL) lost 4.17% and Orocobre Ltd (ASX:ORE) was down 1.67% as iron ore prices fell overnight. Energy companies also traded lower as Santos Ltd (ASX:STO) fell 0.95%, Oil Search Ltd (ASX:OSH) fell 1.17% while Woodside Petroleum Ltd (ASX:WPL) lost 0.93% after news that Sherry Duhe, who joined Woodside in late 2017, is taking up the CFO role at Newcrest Mining Ltd (ASX:NCM) in early 2022. Financials also dragged as Commonwealth Bank Of Australia (ASX:CBA) lost 0.31%, National Australia Bank Ltd (ASX:NAB) fell 0.58% and Westpac Banking Corp (ASX:WBC) closed down 0.35%.
In policy news, Reserve Bank meeting minutes showed that the likelihood of prices rising faster than expected changed in the past month, noting that as risks to inflation forecasts shift higher, it had “become possible that an earlier increase in the cash rate would be appropriate.” Meantime, RBA governor Philip Lowe said the nation’s economic recovery is on track, noting that “Underlying inflation has only just returned to the target range for the first time in six years and it’s only just above the bottom of that target range. In terms of the real economy the recovery is back in track after the interruption caused by Delta.”
On the bond markets, Australia 10-Year rates were at 1.841%, while United States 10-Year rates were at 1.599%.
The In New Zealand, the NZX 50 fell 0.48% to 12903.