The Reserve Bank of Australia unexpectedly hiked its cash rate by 25 basis points to 3.85% after holding its benchmark policy rate at steady at 3.6% in their April meeting. The Australian dollar strengthened by 0.6% to 0.6677 against the U.S. dollar after the move.
In Australia, the S&P/ASX 200 fell 0.92% to close at 7,267.4 as financial stocks led losses.
Asia-Pacific markets were largely mixed on Tuesday as most markets returned after the long Labor Day weekend. Japan’s Nikkei 225 advanced 0.12% to close at 29,157.95 and the Topix fell 0.12% to end the day at 2,075.53.
South Korea’s Kospi closed 0.91% up at 2,524.39 as the nation’s inflation rate slowed to a 14-month low of 3.7%. The Kosdaq climbed 1.52% and closed at 855.61.
Hong Kong’s Hang Seng index climbed 0.22% in its final hour of trade, while the Hang Seng Tech index gained marginally. Mainland Chinese markets were closed for a holiday Tuesday.
Overnight in the U.S., stocks ended lower as JPMorgan Chase took over First Republic Bank after the biggest bank failure in the nation since 2008. The deal came at a crucial week for Wall Street ahead of the Federal Reserve’s key rate decision meeting.
The Dow Jones Industrial Average inched lower by 0.14%, the S&P 500 ticked down 0.04%, and the Nasdaq Composite fell 0.11%.