An interest rate cut has failed to lift the Australian share market into positive territory.
Shares fell in morning trade ahead of the Reserve Bank of Australia’s rates decision, following falls on overseas markets.
The market then barely reacted when the RBA cut the cash rate to a record low of 2.5 per cent, which had been expected.
The major banks, most of which have announced cuts to their variable mortgage rates, closed lower.
RBS Morgans private client adviser Bill Bishop said political debate over the significance of the rate cut may have hurt investor sentiment.
“There’s been so much of that that I think a little bit may have been imprinted on the stock market,” he said.
“The market has not rejoiced.
“People were threatening Armageddon if they didn’t get their rate cut and of course we’re getting the rate cut because things aren’t too good.”
Westpac dropped 13 cents to $31.24, Commonwealth Bank shed 23 cents to $73.53, ANZ lost six cents to $29.76 and NAB closed two cents lower at $31.06.
Iron ore miner Fortescue Metals was a rare positive in the mining sector, adding eight cents to $3.93.
BHP Billiton dropped 13 cents at $35.62, Rio Tinto shed 24 cents to $59.86, and gold miner Newcrest lost 47 cents to $11.78 as the price of the precious metal fell heavily.
Hearing implant maker Cochlear gained 85 cents to $60.00 after its annual profit more than doubled to $133 million.
But engineering firm Downer EDI lost two cents lower to $3.89 even though it posted annual profit growth, as it warned of a challenging year ahead amid mining sector weakness.
KEY FACTS
* The benchmark S&P/ASX200 index was down 5.7 points, or 0.11 per cent, at 5,105.6.
* The broader All Ordinaries index was down 5.8 points, or 0.11 per cent, at 5,088.0 points
* On the ASX 24, the September share price index futures contract was down six points at 5,056, with 19,605 contracts traded.
* The spot price of gold in Sydney finished at $US1291.09 per fine ounce, down $US22.66 from $US1,313.75 on Monday.
* Updated national turnover was 1.4 billion securities worth $3.7 billion.
