Australia: Shares fall ahead of central bank decision, federal budget
[BENGALURU] Australian shares traded lower on Tuesday, dragged down mostly by financial and healthcare stocks, as investors were reluctant to make big bets ahead of the federal budget and key central bank policy decision.
The S&P/ASX 200 index was down 0.38 per cent at 5,919 points, as of 0014 GMT. The benchmark ended 2.6 per cent firmer on Monday.
The major focus for investors is the central bank's policy review later in the day. A Reuters poll of economists showed the bank will likely hold key rates.
"The market is looking down the barrels of two major risk events in the RBA's (Reserve Bank of Australia) rate decision and the federal budget, leading to it exercising caution," said Kyle Rodda, an analyst with IG Markets.
"There is also a little bit of profit-taking at play, after yesterday's rally," he added.
The government is expected to forecast a record budget deficit of around A$200 billion (S$195.4 billion) for 2020/21, and include provisions for tax breaks and spending on infrastructure and wage subsidies in the budget.
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Prime Minister Scott Morrison has repeatedly called this budget the most important since the World War II, as the government tries to lift the virus-ravaged economy out of a technical recession.
Among sectors, financials fell 0.6 per cent, with the so-called "Big Four" banks falling in the range of 0.6 per cent to 1 per cent.
Australia's second-largest insurer Insurance Australia Group fell as much as 1.7 per cent after agreeing to a class action settlement of A$138 million over mis-sold insurance.
Healthcare stocks also fell, with heavyweight CSL losing more than 1 per cent.
On the other hand, gold stocks surged 3 per cent as prices of the underlying commodity rose on US stimulus hopes and against a weakening greenback.
The country's largest independent gold explorer Newcrest Mining jumped nearly 2 per cent as it received conditional approval to list on the Toronto Stock Exchange.
The number of issues in the ASX that advanced were 772, while 495 declined.
Across the Tasman Sea, New Zealand's benchmark S&P/NZX 50 index rose 0.3 per cent, helped by buying in utility and consumer stocks.
REUTERS
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