Global Markets | Australian shares gain as split RBA hike cools rate fears

Australian shares ended higher on Tuesday, led by gains in miners and financials, after the Reserve Bank of Australia raised ‌interest rates ⁠as ⁠expected, while a narrowly split vote tempered expectations of another near-term increase. The S&P/ASX 200 index rose 0.4% to 8,614.3 points, snapping a three-session losing streak. The benchmark tracked steadier global markets as fears of energy supply disruptions through the Strait of Hormuz eased, though oil prices later regained some ground. The RBA raised its cash rate by 25 basis points to a 10-month high ⁠of 4.10%, ‌citing rising petrol prices linked to the Middle East conflict as a risk to inflation.

The narrow 5-4 vote cut ⁠market odds of another hike in May to about 25% from roughly 70%.

"If the RBA maintains a hawkish stance while global rate cuts remain off the table, equities are likely to drift sideways or even decline," said Tim Waterer, chief market analyst at KCM Trade. He added that firmer commodity prices could still offer support to the resource-heavy bourse.


Financials rose 0.6%, extending gains to a ‌third straight session, while real estate stocks added 1%.

Miners climbed 1.1%, helped by firmer bullion prices and gains in gold stocks. Coal miner New Hope Corp fell ⁠6.4% after reporting a sharp drop in first-half profit as weaker coal prices weighed on earnings.

Energy stocks dipped 0.7%, underperforming the broader market. Pepper Money slumped more than 14% after investment manager Challenger lowered its takeover offer for the non-bank lender.

In New Zealand, the benchmark S&P/NZX 50 index closed up 0.1% at 13,182.23 points, with investors awaiting quarterly GDP data on Thursday and watching the near-term outlook ahead of the central bank's April meeting.