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Highlights

  • ASX 200 Declines: The Australian stock market dropped 1.4% on Monday, with the S&P/ASX 200 index reaching 7,783.2 points.

  • Mining and Banking Sectors Struggle: Miners fell 2% due to declining iron ore prices, while major banks lost up to 2%.

  • RBA Decision Anticipated: The Reserve Bank of Australia is expected to keep interest rates unchanged, with economists predicting two rate cuts this year.

Australian shares opened the week on a weak note, dragged down by losses in the banking and mining sectors, as investors awaited the Reserve Bank of Australia’s (RBA) interest rate decision. The S&P/ASX 200 index slumped 1.4% to 7,783.2 points, marking a second consecutive month of losses, with the benchmark set to end March down by 2.3%.

Market Performance

The decline was led by the mining sector, which fell 2% to its lowest level in two weeks. The dip was triggered by a drop in iron ore prices, impacting major players such as BHP, Rio Tinto, and Fortescue Metals, each shedding between 2.2% and 2.3%.

The financial sector also faced heavy losses, with the "Big Four" banks—Commonwealth Bank, Westpac, ANZ, and NAB—declining between 1.5% and 2%, pushing the overall banking index down by 1.6%.

Gold stocks, which had been on a four-day winning streak, also took a hit, with Northern Star Resources falling 0.5% and Evolution Mining losing 0.7%.

In corporate developments, shares of ASX Ltd fell as much as 1.9% after the Australian Securities and Investments Commission (ASIC) ordered the stock exchange operator to conduct an independent review of its clearing platform failure.

RBA Decision Looms

Market sentiment remains cautious as investors brace for the RBA’s policy decision on Tuesday. A Reuters poll of economists suggests that the central bank will keep interest rates unchanged, following last month’s rate cut—the first in over four years.

Despite the RBA’s cautious stance, economists still predict two rate cuts this year, with the next one expected in May. Policymakers, however, have downplayed further cuts, stating they need more evidence of easing inflation before making additional moves.

New Zealand Market Trends

Across the Tasman Sea, New Zealand’s benchmark S&P/NZX 50 index also faced losses, declining 0.3% in its third consecutive losing session. The Reserve Bank of New Zealand announced it would review bank capital requirements, following criticism that the current regulations were overly strict and reducing competition in the financial sector.