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Highlights

  • The S&P/ASX 200 index slipped 0.02% to 8,841.70 after reaching record highs in the previous session.

  • Financial stocks declined 0.1%, with three major banks trading lower between 0.1% and 0.5%.

  • Investors are pricing in a high probability of interest rate cuts by the Reserve Bank of Australia and U.S. Federal Reserve.

Australian shares moved marginally lower on Thursday, retreating slightly from a record high reached in the prior session, with banking sector declines offsetting gains in other areas. Market participants remained cautious ahead of upcoming monetary policy decisions in both Australia and the United States.

The S&P/ASX 200 index declined by 0.02% to trade at 8,841.70 points during the trading session on 7 August 2025. This follows a record closing high of 8,843.70 on Wednesday, when the index also hit an all-time intraday high of 8,848.80.

Investor focus remains on potential policy shifts from central banks. Swaps markets are pricing in a 92% probability of a 25-basis-point interest rate cut by the Reserve Bank of Australia (RBA) at its August 12 meeting. In the United States, traders anticipate a possible rate reduction by the Federal Reserve in September.

Morgan Stanley analysts suggested that any commentary from the RBA is likely to align with their outlook for continued movement towards more neutral policy settings.

On the local market, financial stocks fell 0.1%, dragging the broader index. Within the sector, three of Australia’s "Big Four" banks posted losses ranging from 0.1% to 0.5%. Among these, Commonwealth Bank of Australia (ASX: CBA) and Westpac (ASX: WBC) are scheduled to release their annual and third-quarter earnings reports, respectively, in the upcoming week.

Elsewhere in the financial sector, AMP Limited (ASX: AMP) shares dropped 2.4% after the company’s interim earnings results fell short of market expectations.

In contrast, mining stocks gained 0.2%, while the gold sub-index advanced 1.4% as commodity-related counters found modest support.

Across regional markets, New Zealand’s S&P/NZX 50 index was relatively unchanged at 12,878.46. Analysts at Westpac noted that market sentiment there is also shaped by expectations of monetary easing. The Reserve Bank of New Zealand (RBNZ) is set to announce its cash rate decision on August 20, with market participants anticipating a 25-basis-point rate cut.