[SYDNEY] Australian shares rallied to a near one-year high on Monday, as growing speculation of a rate cut by the Reserve Bank of Australia this week drove more investors out of bonds and into equities.
The S&P/ASX 200 index ended up 25 points, or 0.45 per cent, at 5,587.4.
The central bank will hold its monthly policy meeting on Tuesday, and a majority of economists expect an interest rate cut of 25 basis points to a new low of 1.5 per cent.
Bonds yields are already at record lows in Australia and stand to drop further if rates are cut.
New Zealand's benchmark S&P/NZX 50 index was largely unchanged, up 0.1 per cent at 7,356.6, as investors tread water ahead of the corporate earnings season.