The Australian share market closed 0.6 per cent lower, with investors starting to hope that the central bank would cut interest rates for the first time in a year next month. The local bourse opened almost one per cent down on a weak lead from Wall Street overnight. By the close on Tuesday both major local indices had made back some of their early losses, with the benchmark S&P/ASX200 index down 24.9 points, or 0.64 per cent, at 3,872.1 and the broader All Ordinaries index dropped 25.1 points, or 0.63 per cent, to 3,935.6. The All Ords closed at 3,927.6 on September 26, the lowest since July 2009. Turnover was 2.19 billion shares changing hands for $5.49 billion. All sectors had lost ground at the close, with about six out of ten stocks falling.

Gold rose two per cent on Monday and was on track for its first three day winning streak in a month, as bullion appeared to have regained its safe haven status against global economic uncertainty. The spot price of gold in Sydney was $US1,663.4 per fine ounce, up $US29.52 from Monday's close of $US1,633.88. Gold stocks were among the only green spots on the market, with Australia's biggest gold miner Newcrest up 34 cents, or one per cent, at $33.90 and Kingsgate rising 18 cents, or 2.6 per cent, to $7.06. Telecoms were hit hardest at the close, down 1.2 per cent, despite being the outperforming sector for most of the day. Telstra fell four cents, or 1.3 per cent, to $3.00. All the major retail banks ended lower, except ANZ, which rose four cents to $18.98. The December share price futures index (SPI) fell eight points to 3,880 points, with 50,287 contracts traded.

The Australian dollar sunk to a near 13-month low on Tuesday as the country's central bank raised the prospect of an interest rate cut in the coming months. Also weighing on the commodity-linked currency were still heightened fears of a Greek default, looming global economic slump and more stock market declines in both the U.S. and Asia. In just a month, these concerns and weaker commodity prices have dragged the Australian dollar down more than 10% after the currency had hit a three decade high against the U.S. dollar earlier in the year. The Australian dollar was at $0.9500, down from $0.9625 late Monday, after reaching a low not seen since September 2010 of $0.9453 after the RBA's statement. Against the Japanese yen, the currency changed hands at 72.832, down from 74.149.