Shares of financials declined, with major four lenders leading losses after the Australian Prudential Regulation Authority (APRA) said on Tuesday it will raise capital requirements for banks by 3%age points of risk-weighted assets. This is to cover for any potential major downturn, avoiding a situation like the 2008 financial crisis where banks around the world needed to be bailed out by the government. The big four banks - ANZ Banking, National Australia Bank, Westpac and Commonwealth Bank - were lower in a range of 0.2% to 0.8%.
The materials stocks inclined after rating agency S&P raised its iron ore price forecasts for 2019, 2020 and 2021 as it expected a prolonged hit to supply from the Vale dam disaster in January. Mining giant BHP Group and Fortescue Metals grew almost 2% each, while Rio Tinto was higher by more than 1%.
Consumer stocks inclined despite a weaker consumer confidence reading for the previous week, following the RBA cutting interest rates for a second straight month in July. Domino's Pizza (DMP) rose 3% while Breville Group (BRG) was 3.9% higher. Supermarket giant Coles Group (COL) gained 1.3%.
CURRENCY NEWS: The Australian dollar softened against the U.S. dollar on Tuesday, partly reflecting waning optimism about a near-term interest rate cut following last Friday's much better than expected jobs data. The Australian dollar was quoted at $0.6973, compared to $0.6986 on Monday.
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