Australian shares ended down 0.4 percent on Tuesday, reversing early gains as investors showed their disappointment with the central bank's decision to keep its cash rate steady. Financials and metals and mining stocks were the biggest drag on the index. The S&P/ASX 200 index fell about 25 points to 5,933.9 points at the close of trade. The benchmark peaked at 5,996.9 points in early trade, the highest level since February 2008.
"The RBA decision has definitely knocked the wind out of the market's sails," said Chris Conway, Head of Research at Australian Stock Report. "The 6,000 level is still certainly achievable, but it might now take another three to four weeks before we get there," he added. New Zealand's benchmark NZX 50 index ended up 0.02 percent to finish the session at 5,893.66.
Analysts are split on whether the RBA will cut the cash rate again, following last month's quarter-point reduction to a record low 2.25 percent. The decision is due at 0330 GMT. "It is very much playing the wait and see game in terms of the RBA rate decision. We are seeing some reasonable price action mainly centred around high-yielding stocks," said Ben Le Brun, market analyst at OptionsXpress.
"We haven't seen a high of 6,000 points since the global financial crisis. So, that would be, psychologically, a very important mark for the ASX to reclaim," he added. Financials led gains on hopes of a rate cut with major banks, CBA, Westpac, ANZ and NAB rising 0.6-0.9 percent.
Global miners BHP Billiton and Rio Tinto were each down more than 1 percent. Newcrest Mining, Northern Star and other gold companies were also in the red falling 2-4.5 percent, with some of them coming off after a strong run. Insurance group Suncorp Group Ltd fell over 3 percent after it said its natural hazard expenses for the financial year will exceed the allowance set aside for such events.