ASX loses 0.3% after RBA hikes rates

The news: The Australian sharemarket lost ground on Tuesday, the benchmark ASX 200 shedding 0.3% as the Reserve Bank of Australia lifted the cash rate to an expected 4.35%, and a member of the US Federal Reserve warned of more potential hikes across the Pacific. The ASX 200 closed at 6,977.10, and the All Ordinaries lost 0.2%.

The numbers: It was a case of "Buy the rumour, sell the news" for the Australian dollar, which gave up a quarter of nearly 4% in gains since late October in the 90 minutes following the RBA rate decision. The Aussie is buying 64.4 US cents. By sector, financials stocks led the losses, dropping 1% as Westpac handed back Monday's post-results gains with interest and closed 2.4% lower for the day. IT stocks performed well, lifting 1.4%, with a strong 2.8% gain for logistics software company Wisetech.

The context: China's US-denominated trade balance came in at USD56.5 billion ($127 billion) today, well below a forecast USD81.8. The resulting drop in expected demand overwhelmed oil supply cuts reaffirmed by OPEC+ members to push prices lower, Brent Crude futures trading at USD84.6 per barrel. The ABS will release updated October building approval figures tomorrow morning.