Australian shares recover but still finish down after rate cut
(Updates to close)
SYDNEY May 7 (Reuters) - Australian shares ended 0.2 percent lower on Tuesday after the central bank decided to cut rates, spurring a modest recovery in financials from the day's lows.
The Reserve Bank of Australia cut its main cash rate a quarter point to a record low of 2.75 percent and signalled there was room to ease further to support the economy, given low inflation and an historically high currency.
The S&P/ASX 200 index fell 12.5 points to finish at 5,143.7. The index rose 0.5 percent on Monday. A total of 662 million shares traded hands in another subdued session.
Top lender the Commonwealth Bank of Australia and Westpac Banking Corp lost 1.9 percent and 1.8 percent, respectively, after posting strong gains on the back of dividend- and earnings-driven rallies to all-time highs last week.
National Australia Bank fell 1.6 percent. Australia's largest bank by asset lowered its variable mortgage rate by 25 basis points on Tuesday, passing on the full quarter-point cut in the official cash rate.
BHP Billiton Ltd jumped 2.4 percent while rival Rio Tinto Ltd climbed 2.1 percent.
New Zealand's benchmark NZX 50 index finished the session 0.6 percent or 25.5 points higher at a record closing high of 4,621.7. (Reporting by Thuy Ong; Editing by Kim Coghill)
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