(Adds details, comments)
CANBERRA, Dec 4 Australian shares slipped 0.6
percent on Tuesday, weakening further after the central bank cut
interest rates a quarter point to a record-matching low, with
investor sentiment dampened by concerns about U.S. growth and
Washington budget talks.
The Reserve Bank of Australia (RBA) cut its main cash rate
to 3.0 percent following its monthly policy meeting, bringing
the easing since May to 125 basis points and matching the trough
hit during the darkest days of the global financial crisis.
"It basically wouldn't be enough. They need to do a lot more
than that," said Damien Boey, an equity strategist at Credit
"But on the other side, if they did more than that, if they
did more than 50 bps, they are basically admitting they have a
problem, in which case the market will also sour," he said.
The benchmark S&P/ASX 200 index lost 27.9 points to
4,503.6, according to the latest data. It rose 0.6 percent on
Monday to a five-week high.
Top miner BHP Billiton fell 0.8 percent to A$34.26,
and rival Rio Tinto Ltd slipped 0.2 percent to A$58.41.
Major banks all lost ground after the rate cut, with
Commonwealth Bank of Australia declining 0.5 percent
and Wespac Banking Corp losing 0.6 percent.
Department store Myer Holdings jumped as much as 4
percent before the rate cut, but ended flat. Smaller rival David
Jones edged up 0.4 percent.
Retailers should normally benefit from a rate cut, but
analysts said it might take time for the banks to pass on the
"It (the rate cut) might not have the same impact as a
November cut might have had," said Cameron Peacock, a market
analyst at IG Markets. He said a cut last month would have had
more time to work through the system.
Shares in GrainCorp Ltd jumped 3.2 percent, after
U.S. agribusiness giant Archer Daniels Midland Co raised
its takeover bid for the grains handling company.
New Zealand's benchmark NZX 50 index fell 0.8
percent to 4,015.7.
(Reporting by Maggie Lu Yueyang; Editing by Jonathan Thatcher)