Energy sector drags bourse into the red
Energy stocks nudged the sharemarket into the red as the Reserve Bank signalled it might be nearing the end of its easing cycle.
The S&P/ASX 200 Index finished down 0.1 per cent at 5105.6 points, while the broader All Ordinaries slipped 5.8 points, or 0.1 per cent, to 5088.
The Reserve Bank cut the cash rate by a further 25 basis points to 2.5 per cent, in a widely expected decision. The bank's statement was slightly less dovish than previously, leading some observers to reduce their expectations of another rate cut.
The dollar jumped about half a cent to US89.8¢ after the rates decision, while shares slipped down before recovering a little in late trade.
Westpac analysts Damien McColough and Timothy Jung expected the market's bearish reaction to the rate cut to be short-lived. "While the RBA rhetoric appears to be more neutral in terms of its forward guidance, there is little to suggest that the easing cycle is at an end," the pair said. "The more neutral guidance will have disappointed those looking for a 50 basis points cut, or signs that the RBA were more concerned with the domestic demand profile. [But] we will remain buyers into the current dip."
RBS Morgans private client adviser Bill Bishop said political debate over the significance of the rate cut may have hurt investor sentiment.
"There's been so much of that that I think a little bit may have been imprinted on the stockmarket," he said.
The energy sector was the market's worst performer, sliding 1 per cent. Woodside led the plunge, falling 46¢, or 1.2 per cent, to $38.76. Santos was down 1.2 per cent at $13.87, while Origin Energy finished 0.8 per cent weaker at $12.03.
Among the miners, index heavyweight BHP Billiton finished 13¢, or 0.4 per cent, lower at $35.62, while Rio firmed 24¢, or 0.4 per cent, to $59.86.
Telstra was among the best-performing stocks, rising 0.4 per cent to $5.07.
Hearing implant maker Cochlear gained 85¢ to $60 after its yearly profit more than doubled to $133 million.
But engineering company Downer EDI lost 2¢ to $3.89 even though it posted annual profit growth, as it warned of a challenging year ahead amid mining sector weakness.