S&P/ASX 200 watch: Australian index slides as RBA leaves rate unchanged

on Dec 3, 2013
Updated: Oct 21, 2019
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iNVEZZ.com, Tuesday, December 3: The S&P/ASX 200 index has edged lower today following mixed economic data and after the Reserve Bank of Australia (RBA) left its key interest rate unchanged.

Asia-Pacific stocks outside Japan have declined with strong manufacturing data in the US fuelling concerns that the Federal Reserve will scale back its monetary stimulus sooner rather than later while Japanese shares found support from a weaker yen.
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**S&P/ASX 200 down after RBA decision and mixed data**

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As of 05:17 UTC, the S&P/ASX 200 had dropped 23.42 points to be 0.44 percent down at 5,256.10. Today, the RBA left its benchmark interest rate unchanged at a record low of 2.5 percent noting that the nation’s currency was still ‘uncomfortably high’.
The S&P/ASX 200 was under pressure for a second straight session following mixed economic data. While October retail sales surpassed estimates, the nation’s current account deficit widened in the third quarter from the previous quarter.

CNBC quoted economists from Goldman Sachs Australia as saying in a research note: “Our forecasts embed a moderate increase in consumer spending into the first half of 2014, and we do not view the most recent improvement as the commencement of a ‘v-shaped’ recovery”.
Among the top fallers in the S&P/ASX 200 was Newcrest Mining (ASX:NCM), the nation’s biggest gold producer, whose shares slumped 6.69 percent to close at A$7.25 with the price of gold heading for its first annual drop in 13 years. Rio Tinto (ASX:RIO) closed 0.55 percent lower at A$65.49 after saying that it expected to halve capital spending by 2015 from last year’s level to cut debt.

**Fed tapering worries weigh on Asia-Pacific shares**
Elsewhere in the Asia-Pacific, the NZ 50 index declined 0.18 percent to 4,783.85, while the Shanghai Composite index edged 0.44 percent higher to 2,217.06. South Korea’s KOSPI index slumped 1.05 percent to 2,009.36 points.
Yesterday, data showed that the US manufacturing sector had expanded at its fastest pace in over two years in November, with the news fuelling speculation of an early tapering of the Fed’s bond buying programme.

Matthew Sherwood, head of investment markets research at Perpetual Ltd, told Bloomberg that economic data over the past few weeks had “been progressively coming in better and markets are now in the mood to put good economic news as bad news because that will bring forward any reduction in central-bank support”.

The US manufacturing figures however sent the greenback higher against the yen, which benefitted Tokyo-listed exporters and propped up the Nikkei 225.
“I think it’s easier to buy Japanese stocks with a weaker yen while investors may be nervous about other share markets ahead of the US jobs data,” Isao Kubo, a Tokyo-based equity strategist at Nissay Asset Management Corp, told Bloomberg. “But shares can fall anytime because they have risen very fast.”
**The S&P/ASX 200 was 0.44 percent down at 5,256.07 points as of 06:01 UTC on 3 December 2013.**
**The NZX 50 was 0.18 percent down at 4,783.85 points as of 04:30 UTC on 3 December 2013.**]
**The Nikkei 225 was 0.72 percent up at 15,767.29 points as of 05:56 UTC on 3 December 2013.**
**The Shanghai Composite was 0.58 percent up at 2,220.07 points as of 06:03 UTC on 3 December 2013.**
**The Hang Seng was 0.47 percent down at 23,926.59 points as of 06:03 UTC on 3 December 2013.**
**The KOSPI was 1.05 percent down at 2,009.36 points as of 06:01 UTC on 3 December 2013.**

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