Market Affected By Today’s Rate Cut Announcement

Suggestions of a cash rate cut by the Reserve Bank of Australia (RBA) next week has affected stock performance, as the Australian market had lacklustre activities and trading closed on a flat note today.

Early in the day, the market was already trading weakly, but then showed signs of improvement by midday as the governor of RBA announced a planned interest rate cut. In his speech, Governor Glenn Stevens said that while business confidence improved, “monetary easing” was an option the RBA was looking into during the monthly board meeting.

Minutes after his speech, however, the dollar fell, but equities remained stable and moving slightly higher from Monday’s numbers.

Traders on the floor were surprised, that the governor’s comments did not trigger more improvements and gains. “It has been neither here nor there, probably due to the fact that there has been no real overly convincing data come out from anywhere,” says CMC Market’s Betty Lam.

Analysts expect some improvements by next week, though, as more data coming from the United States should help ease the numbers.

Meanwhile, Woolworths was one of the big losers in today’s trading, even after it announced its annual sales had improved to $59 Billion. Also down were other consumer staples and Woolsworths’ rival Coles, Wesfarmers.

The big four: Commonwealth, ANZ, NAB and Westpac seemed to have recovered from losses, with their stocks up and faring better than yesterday’s close.