That was a dose of reality many investors didn’t expect.
After being up as much as 2% in early trading the ASX 200 ended another volatile session with a gain of 0.7% thanks to the Reserve Bank’s rate cut decision.
The cut in the cash rate to a new all-time low of 0.50% sent banking stocks into a slump that dragged the S&P/ASX 200 index down from a session high of 6524.3 to a closing 6435.7 points.
The big four banks all started Tuesday’s session in green, but all closed lower in the wake of the rate cut.
The Commonwealth Bank closed 1.7% lower at $79.11, ANZ lost 1.4% lower at $24, NAB dropped 1.4% to $24.13 and Westpac dropped 1.1% to $22.94.
Energy and consumer discretionary also underperformed. Woolworths shed 1.6% lower at $38. Information technology and healthcare out-performed with a rise of 2.5%.
The driver was CSL which has now overtaken Commonwealth Bank as the most valuable stock on the ASX.
CSL’s rose from $138.9 billion to $142 billion while Commonwealth Bank’s value fell to $140 billion from $142 billion.
BHP has a market cap of $160 billion but is dual-listed on the London exchange.
Most regional markets posted gains for the session, led once again by mainland Chinese equities which rose between and then fell in late trade to end up 0.74% instead of a rise of more than 1%.
The Tokyo market though fell 1.22% and early trading in Europe was mixed.
Xero shares jumped 7.2% to $79.94 while Bega Cheese shares added 6.5%.
