Australia: Shares eye best day since late-Jan ahead of RBA decision

AUSTRALIAN shares rose more than 2 per cent on Tuesday to mark their biggest intraday jump since Jan. 28, tracking a strong performance on Wall Street, even as domestic investors braced for another half-point interest rate hike later in the day.

As of 2340 GMT, the S&P/ASX 200 index was up 2.2 per cent at 6,596.8 points. The benchmark closed 0.3 per cent lower on Monday.

Major indexes on Wall Street rallied overnight, as US Treasury yields tumbled on weaker-than-expected manufacturing data, increasing the appeal of stocks at the start of the year’s final quarter.

Australian mining stocks jumped as much as 3.1 per cent to hit their highest level since Sept. 21. Mining heavyweights Rio Tinto and BHP Group gained more than 3 per cent each.

Gold explorers also recorded gains, surging 4.9 per cent to hit their highest in nearly three weeks, benefiting from higher bullion prices.

Newcrest Mining jumped as much as 4.1 per cent to hit a two-week high, while Northern Star Resources hit levels not seen since mid-August. Sayona Mining climbed 8.9 per cent after the miner announced plans to fast-track its lithium operations in its project in Quebec, Canada.

Later in the day, the Reserve Bank of Australia is expected to increase borrowing costs further than previously thought in its most aggressive tightening cycle since the 1990s.

Over 70 per cent of economists surveyed by Reuters predicted the RBA would hike its cash rate by 50 basis points to 2.85 per cent, with the rest forecasting a smaller 25 basis-point hike.

Financials rallied 2.4 per cent and could record their best day since late-June, if they hold on to the gains. Shares in the so-called “Big Four” banks rose between 2.2 per cent and 3.1 per cent.

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Australia: Banks drag shares lower, focus on RBA decision

Meanwhile, the Australian government said resources and energy export earnings are forecast to jump 7 per cent to a record A$450 billion (S$415 billion) this fiscal year, bolstered by soaring coal and gas prices.

New Zealand’s benchmark S&P/NZX 50 index was up 1.1% at 11082.52 points. REUTERS