Australia Market surges after RBA surprise

Australia stock market finished session higher on Tuesday, 04 October 2022, as investors chased for bargain hunting on tracking positive lead from Wall Street overnight and the country's central bank smaller-than-expected 25 basis points rate hike.

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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