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Australia stocks climb after central bank cuts interest rates

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[BENGALURU] Australian shares had their best day in almost a month on Tuesday after the country's central bank eased monetary policy, with rate-sensitive sectors driving the late gains.

The Reserve Bank of Australia cut rates for a third time this year to stimulate the sluggish economy as expected, and signalled that it may be prepared to cut further if needed.

The move sent the benchmark S&P/ASX 200 index 0.8 per cent, or 54.5 points, higher to 6,742.8.

Real estate stocks REA Group and Domain Holdings Australia jumped 1.9 per cent and 6.2 per cent, respectively.

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Record low interest rates have boosted home prices, with data earlier in the day showing that home prices enjoyed their biggest monthly jump in 2-1/2-years in September with the dominant markets of Sydney and Melbourne bouncing strongly.

Consumer-focused stocks rose, with the country's two biggest airlines Qantas Airways and Virgin Australia closing 2.4 per cent and 3.1 per cent higher following the rate cut.

Elsewhere, the country's top two lenders Commonwealth Bank of Australia and Westpac Banking Corp ended higher after trading in a thin range for most of the session.

The export-driven healthcare sector climbed, with heavyweight CSL rising 2 per cent as the local currency weakened to a one-month low following the rate cut.

Across the Tasman sea, New Zealand's benchmark S&P/NZX 50 index closed 0.7 per cent higher at 10,996.99.

Heavyweight a2 Milk Company firmed 1 per cent.

However, local listings of Westpac Banking Corp and Australia and New Zealand Banking Group weakened.

Earlier in the day, the Reserve Bank of New Zealand (RBNZ) said its final decision on a proposal to increase the amount of capital banks must hold will be announced in December.

The banks have said in the past they would scale back or sell their businesses in the country if the RBNZ pushes ahead with the plans.

REUTERS