Australian shares eked out gains on Tuesday, buoyed by miners and tech stocks, while the central bank delivered a widely expected rate hike and signalled further tightening to tame stubborn inflation.
The Reserve Bank of Australia board voted unanimously to lift the cash rate by 25 basis points to a 15-year high of 4.60%, its fourth increase this year.
RBA Governor Michele Bullock said the board did consider keeping interest rates steady this time, adding that the central bank is now trying to look forward and see what the rate rises so far would do to the economy.
The hike briefly knocked the S&P/ASX 200 benchmark into negative territory before it rebounded to finish 0.3% higher at 8,709.30 points.
"Our base case is that rates have probably peaked as the RBA has likely now done enough to weaken demand sufficiently to push inflation back to target by the end of next year," said AMP's Chief Economist Shane Oliver.
Rising mortgage and fuel costs, falling home prices, and a softening labour market point to a further cooling in economic activity and a greater risk of recession, Oliver added.
Futures now imply a 44% chance of another increase in November, and a 60% chance in December.
Rate-sensitive real estate stocks shed 0.2%, while the country's benchmark 10-year bond yields remained near levels last seen in mid-2011.
Financials slipped 0.1%, with top lender Commonwealth Bank of Australia losing 0.8%.
Energy stocks declined 0.7%, with sector majors Woodside and Santos down 0.9% and 1.1%, respectively.
Miners climbed 1.1% to snap a three-session losing streak on stronger copper. World's largest listed miner BHP rose 1.4%.
Tech stocks jumped 4.6%, notching their strongest session in over two months. Codan and Megaport , advanced 23.9% and 9.4%, respectively, after both tech firms reported robust forecasts.
New Zealand's S&P/NZX 50 index fell 1.1% to 13,683.63 points, its weakest session in three weeks. - Reuters
