AU Evening Wrap | ASX Dips Amid Bank Sell-Off Despite China-Driven Resource Rally

A rally in mining stocks helped mitigate broader market losses as iron ore prices surged above $US94.05 per tonne following the People's Bank of China's announcement of policies to boost bank lending and cut short-term interest rates. These measures aimed to support the property market, a major consumer of iron ore. Consequently, BHP rose 3.3%, Rio Tinto increased 3.7%, and Fortescue Metals advanced 1.8%. Other mining companies also benefited, with Minerals Resources gaining 6.5%, Sandfire Resources climbing 6.2%, and Liontown Resources jumping 7.1%. IG analyst Tony Sycamore noted that this rally in mining stocks came at the expense of big banks.

Australia's central bank kept interest rates unchanged at 4.35%, diverging from global counterparts like the Federal Reserve that are loosening monetary policy due to controlled inflation. The Reserve Bank of Australia's (RBA) decision reflects ongoing concerns about domestic price pressures, tight labor markets, and migration-driven cost increases. While other central banks' rate cuts risk elevating the Australian dollar and impacting exports, the RBA remains vigilant about inflation risks and maintains a restrictive policy stance. Despite debates among economists about the sustainability of this approach, the RBA's cautious stance is reinforced by the resilience of Australia's labor market and concerns over potential policy missteps.

Online luxury retailer Cettire's shares soared 79% to $2.38 following the approval of its accounts by auditors after a month of discussions.