The S&P/ASX 200 index ended at 7,530.30 points. It closed flat on Monday as well.
The Reserve Bank of Australia (RBA) said there would be no rate change till 2024 and surprised some by cutting its bond buying by A$1 billion ($742.60 million) a week to A$4 billion, though it also extended the programme to at least mid-February.
There had been speculation it would delay the tapering altogether given stay-at home orders in Sydney, Melbourne and Canberra were set to cause a vicious economic contraction this quarter.
Goldman Sachs analysts expect the RBA to further taper the bond buying programme to A$3 billion per week in February 2022, before continuing to step down by A$1 billion a week per quarter until the program ends in late 2022.
Mining giants Rio Tinto, BHP Group and Fortescue Metals fell between 0.4% and 3.1%, dragging the mining index down 1.1% to a five-month low as iron ore prices slumped.
Gold stocks also fell 0.8%.
Energy stocks bucked the trend to gain 0.8% as Brent prices rose. Whitehaven Coal jumped 3.1% while refiner Ampol rose 1.1%.
Investors were also wary of any reaction from the US Federal Reserve in response to weak jobs data last week.
“It was expected that the RBA would take a dovish stance but the local market is still nervous as it is looking out for the Fed’s view on tapering following a disappointing jobs growth data in the US announced on Friday,” said Brad Smoling of Smoling Stockbroking.
New Zealand’s benchmark S&P/NZX 50 index ended 0.17% higher at 13,321.99 points.
