ASX 200 Declines Amid RBA Rate Hold and Inflation Concerns
ASX 200 Declines Amid RBA Rate Hold and Inflation Concerns
1
The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.
The Australian stock market witnessed a downturn on Tuesday as the Reserve Bank of Australia (RBA) opted to leave interest rates unchanged, while cautioning about the potential for persistent inflation beyond the preferred range.
The ASX 200 dropped by 81.1 points, or 0.91%, closing at 8813.7.
Meanwhile, the All Ordinaries index similarly decreased by 84.3 points, or 0.92%, settling at 9098.2.
Initially, the market responded positively at 2:30 pm following the RBA's decision to maintain the cash rate at 3.6%. However, the sentiment shifted negatively as RBA Governor Michele Bullock addressed the media, noting the risk of inflation possibly exceeding the central bank's target of 2-3% for an extended period. Bullock reiterated the central bank's stance, explaining that while monetary policy remains somewhat tight, technical forecasts suggest only a gradual fall in inflation.
Kyle Rodda, a senior analyst at Capital.com, emphasised that the RBA is aware of the inflationary pressures possibly persisting longer than anticipated. As a result, market expectations for further rate reductions diminished, with traders adjusting to the RBA's projections which hint at potential rate cuts mainly due to technical considerations.
The ASX downfall encompassed almost all of its sectors, with utilities experiencing the steepest decline of 2.78%. Companies such as Origin Energy and AGL Energy saw their shares decrease by 3.8% and 3.73%, respectively. Mining shares also suffered, with BHP slipping 1.91% and Rio Tinto down 2.59%.
In the financial sector, results were mixed as Westpac saw a rise of 1.51%, whereas other major banks like Commonwealth Bank and NAB recorded losses. The real estate sector, sensitive to interest rate changes, fell 1.18% as investors adjusted to the unchanged rate stance.
Globally, the scenario wasn't much different; Wall Street exhibited mixed results, influenced by its own set of economic factors. On Monday night, the Dow Jones Industrial Average fell by 226 points, while the S&P 500 and Nasdaq indices managed small gains.
On the corporate front, City Chic Collective reported promising sales results, propelling its stock price by 8.75%. Conversely, G8 Education experienced a significant drop of 13.04% following news of declining occupancy rates. Among other notable movements, DroneShield surged 8.6%, marking it as the best performer on the ASX200, while Boss Energy saw a 5.9% decline.
The Australian dollar remains at US65.1 cents, reflecting ongoing currency market dynamics amidst the local and global economic developments.
Published:Tuesday, 4th Nov 2025 Source: Paige Estritori
Please Note: If this information affects you, seek advice from a licensed professional.
Westpac Banking Corporation has reported a slight decrease in its annual profit, recording A$6.99 billion for the fiscal year ending September 30, 2025, down from A$7.11 billion the previous year. Despite this decline, the result surpassed analysts' expectations of A$6.83 billion. The bank attributes this dip to intensified competition within Australia's mortgage market and a marginal reduction in its net interest margin, which fell by 1 basis point to 1.94%. - read more
The Reserve Bank of Australia (RBA) has decided to keep the official cash rate unchanged at 3.60% during its November meeting. This decision reflects the central bank's cautious approach in balancing inflation control with economic stability. Recent data indicates that the headline consumer price index (CPI) rose to 3.2% in September 2025, up from 2.1% in the June quarter, signaling persistent inflationary pressures. - read more
In a significant development for the motorcycle industry, KTM AG has successfully secured €600 million in funding, enabling the company to fulfill its restructuring plan and stabilize its financial position. This funding comes at a crucial time, as KTM faced a severe financial crisis that led to self-administration and a comprehensive restructuring process. - read more
Peter Stevens Motorcycles, a cornerstone of the Australian motorcycle retail industry, has entered voluntary administration, casting uncertainty over the future of the company and its approximately 400 employees. Founded in 1970 by the Chiodo family, the retailer expanded to 15 locations across Victoria, South Australia, New South Wales, and Western Australia, representing major brands such as Harley-Davidson, Ducati, and Triumph. - read more
Whether you're a budding entrepreneur or an established business owner, understanding your funding options is crucial in turning your innovative ideas into reality. The path to securing the right financial support can be both thrilling and challenging, making informed decisions a critical part of your success story. - read more
In the vibrant world of startups, securing funding is often the key to turning a business idea into a reality. For Australian entrepreneurs, understanding the landscape of available financial resources is crucial. Whether you're launching a tech startup in Sydney or opening a new café in Melbourne, accessing capital can be a deciding factor in your venture's success. - read more
Government grants can be a lifeline for startups seeking funds to launch or expand their businesses. These grants are sums of money provided by governmental bodies that do not require repayment, making them an attractive option for entrepreneurs. - read more
Creating a compelling pitch is crucial for any entrepreneur seeking to attract investors. It's more than just presenting numbers and forecasts; it's about connecting on a human level and conveying your vision effectively. - read more
Knowledgebase
Mortgage: A loan in which the borrower (the mortgagor) offers a property and land as security to the lender (the mortgagee) until the loan is repaid. Repayments of the loan are usually made on a monthly basis over a long period of time, typically 25 years.
