The Reserve Bank of Australia raised its benchmark interest rates by 25 basis points to 2.60% saying it wants to strike a balance between tightening policy and ensuring that economic growth remains steady. The Reserve Bank of Australia said its rate hike of 25 basis points will "help achieve a more sustainable balance of demand and supply" in the nation's economy. The central bank said it expects to continue increasing rates over the period ahead.
At closing bell, the benchmark S&P/ASX200 index rose 242.42 points, or 3.75%, to 6,699.29, with all sectors finishing in positive territory. The broader All Ordinaries index added 248.95 points, or 3.74%, to 6,905.34.
Financials soared, with the country's "Big Four" banks adding between 4% and 5%. Following the rate hike, National Australia Bank said it would raise home loan rates by 0.25% per annum.
Shares of materials and resources jumped, with sector behemoths BHP Group, Rio Tinto and Fortescue Metals Group gaining between 1.7% and 3.8%.
Energy stocks ended higher on tracking a jump in crude prices as sources said the Organization of the Petroleum Exporting Countries and its allies are considering their biggest output cut since the start of the COVID-19 pandemic. Woodside Energy and Santos surged 4.9% and 4.2%, respectively.
CURRENCY NEWS: The Australian dollar was down 0.8% at $0.64625 against the greenback shortly after the RBA decision.
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