By Oliver Gray
Investing.com - The ASX 200 lost 46.50 points or 0.63% to 7,324.30 in Tuesday’s trade, retracing gains of 0.8% in the previous session as policymakers from the Reserve Bank of Australia removed their 2024 rate guidance amid a stronger-than-expected economic recovery, while discontinuing the 3-year bond yield target.
Among stocks, heavyweight mining companies suffered losses amid weaker iron and steel prices, with Rio Tinto Ltd (ASX:RIO) down 2.42%, BHP Billiton Ltd (ASX:BHP) losing 2.11% and Fortescue Metals Group Ltd (ASX:FMG) falling 2.37%. Meantime, Beach Energy Ltd (ASX:BPT) lost 3.93% after managing director Matt Kay announced his resignation after five years in the role.
In policy news, RBA officials held the current cash rate at a record low of 0.1%, while discontinuing its target on the Australia 3-Year bond yield, reflecting the improvement in the economy and the earlier than expected progress towards the inflation target. However, the board also noted that it “will not increase the cash rate until actual inflation is sustainably within the 2 to 3 per cent target range. This will require the labour market to be tight enough to generate wages growth that is materially higher than it is currently. This is likely to take some time. The Board is prepared to be patient, with the central forecast being for underlying inflation to be no higher than 2.5 per cent at the end of 2023 and for only a gradual increase in wages growth.”
In New Zealand, the NZX 50 fell 0.29% to 12993.