The ASX Today: Reserve Bank holds for first time in CY26, markets digest inflation risks

Good afternoon and welcome to The ASX Today. The Aussie market spent much of the session in the red as investors locked in profits after yesterday’s relief rally. Mid-afternoon, the RBA has left the cash rate unchanged at 4.35% in a unanimous decision.

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This outcome was widely expected, though many were waiting to see what comments came with the hold. There, the board acknowledged the economy is showing signs of slowing, and maintained inflation remains “too high.”

The decision comes as investors all over the globe continue to grapple with the inflation fallout from the Middle East conflict — and that’s despite signs of easing tensions following a U.S.-Iran agreement to reopen the Strait of Hormuz. The local market was down 0.3% at lunchtime.

While local markets weakened, Wall Street continued charging higher overnight, with both the Dow Jones and S&P 500 reaching fresh record highs. Adding to the global picture, the Bank of Japan today lifted its benchmark interest rate to one per cent, its highest level since 1995.

Investors have also kept one eye on SpaceX, which reportedly added another US$412 billion in market value after a further 20% jump.

Rate-sensitive sectors bore the brunt of the selling. Wesfarmers fell 1.9%, JB Hi-Fi lost 1.2%, WiseTech Global dropped 3%, and TechnologyOne gave up 2.2%. The major banks were mixed as analysts warned that slowing housing credit growth could become a headwind for the sector.

Gold stocks held up well, with the precious metal steady ~ US$4,300 an ounce following Monday’s rally. Newmont added 1.8% and Northern Star, 1.9%.

Energy was the brightest spot among sectors. Woodside rose 1.6% and Santos added 1.2% as oil edged higher. However, Karoon plunged 7.7% after downgrading its CY26 production outlook and confirming a key project restart would be delayed until at least CY27.

Elsewhere, Atlas Arteria slipped 0.2% as it again urged shareholders to reject IFM Investors’ $5.10-a-share takeover, arguing it undervalues the business.

And finally, Southern Cross Electrical Engineering jumped 14.2% after successfully completing a $150 million institutional placement, while Valiant Gold rose as much as 4.7% on encouraging drilling results from its South Emu-Triton project in Western Australia.

That’s The ASX Today. I’ll see you tomorrow.

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