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Australian Market Declines Ahead Of RBA Decision

The Australian stock market is declining on Tuesday despite the positive lead overnight from Wall Street as investors treaded cautiously ahead of the Reserve Bank of Australia's interest rate decision due later in the day. The RBA is widely expected to keep its benchmark lending rate unchanged at 1.50 percent.

In late-morning trades, the benchmark S&P/ASX 200 Index is losing 21.20 points or 0.37 percent to 5,708.10, off a low of 5,704.40 earlier. The broader All Ordinaries Index is down 22.30 points or 0.39 percent to 5,769.00.

The big four banks are mixed. ANZ Banking is rising 0.4 percent and Westpac is adding 0.2 percent, while Commonwealth Bank is losing 0.3 percent and National Australia Bank is down 0.2 percent.

QBE has increased the amount it sets aside for natural disasters to A$1.75 billion as a string of hurricanes and earthquakes in recent months made 2017 the company's most costly year ever. Shares of the insurance giant are losing almost 4 percent.

Oil stocks are also weak. Woodside Petroleum and Oil Search are losing almost 1 percent each, while Santos is down more than 1 percent after crude oil prices dipped overnight.

In the mining sector, BHP Billiton is down 0.2 percent, while Rio Tinto is adding 0.3 percent and Fortescue Metals is advancing 0.4 percent.

Gold miners are mixed. Evolution Mining is adding 0.5 percent, while Newcrest Mining is losing more than 1 percent.

Sonic Healthcare said that its UK joint venture, Health Services Laboratories, has received a 12-year contract to provide pathology and laboratory services to two London hospitals. However, the company's shares are down 0.7 percent.

Theme parks and cinemas operator Village Roadshow has sold its stake in Singapore cinema business Golden Village for A$165 million. Shares of Village Roadshow are adding 0.2 percent.

On the economic front, the Australian Bureau of Statistics said that the total number of building permits issued in Australia was up a seasonally adjusted 0.4 percent on month in August, coming in at 18,514. That was shy of expectations for a gain of 1.0 percent following the 1.7 percent decline in July.

The Housing Industry Association said that new home sales in Australia climbed a seasonally adjusted 9.1 percent on month in August. The August figure marked a solid rebound from a 15.4 percent contraction in July.

Australia will also September numbers for job ads and commodity prices today.

In the currency market, the Australian dollar is higher against the U.S. dollar on Tuesday. In early trades, the local unit was trading at US$0.7830, up from US$0.7820 on Monday.

On Wall Street, stocks closed higher on Monday after a report from the Institute for Supply Management showed an unexpected acceleration in the rate of growth in manufacturing activity in the month of September. A separate report released by the Commerce Department showed construction spending in the U.S. increased by more than expected in the month of August.

The Dow advanced 152.51 points or 0.7 percent to 22,557.60, the Nasdaq rose 20.76 points or 0.3 percent to 6,516.72, the S&P 500 climbed 9.76 points or 0.4 percent to 2,529.12.

The major European markets also moved to the upside on Monday. While the U.K.'s FTSE 100 Index jumped by 0.9 percent, the German DAX Index and the French CAC 40 Index climbed by 0.6 percent and 0.4 percent.

Crude oil futures tumbled Monday as the U.S. dollar continued to strengthen. WTI crude oil declined $1.24 or 2.17 percent to close at $50.43 a barrel on the New York Mercantile Exchange, sliding from a recent 4-month peak.

by RTT Staff Writer

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