ASX slips as optimism fades, RBA holds cash rate at 4.35%

The news: The Australian sharemarket finished lower on Tuesday after Wall Street exuberance lost steam for now. The benchmark ASX 200 fell 0.9% to close at 7,061.60, despite a small rebound in the afternoon when the RBA announced its an expected hold of the cash rate target at 4.35%.

The numbers: The Aussie dollar has been losing ground against the greenback this week, falling from as high as 66.9 US cents on Monday morning to 65.8 US cents this afternoon. The US dollar has gained against most major currencies, tampering demand for oil, which was mostly steady despite warnings of extended supply cuts from Saudi Arabia. Brent futures were down roughly one cent to USD78.02 a barrel. By sector, only health and utilities stocks finished in the green, with rough days for energy (-2.0%), materials (-1.8%) and real estate stocks (-1.4%). Miners took a hit, with Mineral Resources and Northern Star both losing more than 4%, while short-selling target Pilbara Minerals shed 8.2%.

Bitcoin cracked USD42,000 ($63,829) for the first time since April 2022, as recent excitement over a potential ETF approval combined with expectations of Fed rate cuts in 2024 to drive investment in the risk-on asset. The cryptocurrency is currently buying USD41,854.

The context: The ABS will publish Australia's quarterly GDP figure tomorrow morning, and most analysts are expecting a 0.4% growth rate for the second month in a row. US services PMI and job openings will print overnight. In a quieter week for AGMs, investors have Washington H. Soul Pattinson's to look forward to on Friday.