Australian shares slide after central bank takes rate cut off the table

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RBA keeps cash rate unchanged at 3.60%

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RBA governor rules out further rate cuts

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Miners fall 0.6%, lead broad-based declines

(Updates to close)

By Shruti Agarwal

Dec 9 (Reuters) - Australian shares settled lower on Tuesday in a broad-based selloff led by miners, as the central bank ruled out further policy easing after keeping interest rates steady as expected.

The S&P/ASX 200 index fell 0.5% to 8,585.90 in its second straight session of declines.

The Reserve Bank of Australia (RBA) kept the cash rate steady at 3.60% in its last policy meeting of the year.

While the initial market reaction was muted, selling picked up pace after RBA Governor Michele Bullock said rate cuts were not on the horizon for the foreseeable future, and that the board discussed the circumstances under which rates might need to be raised again.

The RBA reiterated its concerns around inflation, saying persistent price pressures would warrant a discussion at its February meeting.

The combination of sticky inflation, a still-tight labour market and uncertain productivity trends is keeping the central bank on edge, said Marc Jocum, investment strategy and research manager at Global X ETFs.

"The cautious, data-dependent tone is effectively masking a more hawkish internal bias, and markets are now adjusting to that reality," he said.

Investors have brought forward bets for rate hikes next year, with a move in February seen as a 28% probability, while March has moved closer to 50%.

Miners fell 0.6% on Tuesday as iron ore prices extended losses and copper eased off a record high. Heavyweight BHP fell 0.4%.

Gold stocks shed 1.5%, mirroring a fall in bullion prices amid cautious trading ahead of the U.S. Federal Reserve's rate decision on Wednesday.

Energy stocks slipped 0.9% after a dip in oil prices overnight.

Real estate stocks, which were in positive territory before the central bank's statement, ended 0.3% lower.

Financials fell 0.1% and healthcare stocks retreated 1%.

New Zealand's benchmark S&P/NZX 50 index fell 0.2% to 13,454.78. (Reporting by Shruti Agarwal in Bengaluru; Editing by Subhranshu Sahu)