ASX 200, banks down as market awaits RBA decision

The market anxiously awaits tomorrow's decision.

Ryan Newman (TMFNewmy)

Ryan Newman (CFA) is the Director of Research of The Motley Fool Australia, and Portfolio Manager for the Pro and North Star services. Ryan’s interest in investing and stocks began at a young. His journey with The Motley Fool started first as a member but when the company first came to Australia he joined the team as one of our writers. Recognising his investing talent and passion, it wasn’t long before he was approached to join the investing team as a research analyst on Pro. Ryan is passionate about learning and continual development. He earned his Chartered Financial Analyst (CFA) designation in 2022, and has completed his Bachelor of Accounting and his Graduate Certificate of Corporate Finance. Ryan loves spending time with his young family as well as non-fiction reading, catching the latest movies and following his sports team, the St Kilda Saints (AFL).

Published August 5, 2013 1:34 pm AEST

The S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) is slightly down today in quiet trading as the market awaits tomorrow's interest rate decision by the Reserve Bank. Some traders are likely also taking their profits as the market anticipates a number of companies' earnings reports which are due to be released over the next week.

Analysts have given it an 80% likelihood that the central bank will drop the official cash rate tomorrow with inflation figures coming in at the lower end of expectations and the level of investment in the non-mining sectors not yet making up for the mining sector's decline.

After 10 consecutive days of gains for the benchmark index (which has also seen the Australian dollar fall as low as US 88.49c), IG strategist Stan Shamu believes that "a rate cut is now well priced in, and that it's now all about whether we will get further rate cuts."

Meanwhile, the market is also awaiting other key economic data including figures on housing, retail and employment which will give an indication of the effects the slowing economy is having on corporate Australia.

The major banks are amongst the market's losers today with Westpac (ASX: WBC) down 0.16%, ANZ (ASX: ANZ) has lost 0.5%, Commonwealth Bank (ASX: CBA) is down 0.3% and NAB (ASX: NAB) is trading flat.

Foolish takeaway

Whilst the banks could benefit from an interest rate cut (which could see their share prices jump), none of the banks appeal as good investment prospects at today's prices – despite their attractive dividend yields.

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Motley Fool contributor Ryan Newman does not own shares in any of the companies mentioned in this article.

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