ASX 200 Closes Higher as Tech Stocks Surge and RBA Hikes Rates to 15-Year High of 4.6% Amid Inflation |
SYDNEY — Australian shares closed higher Tuesday, as a rally in technology stocks helped the market shrug off the Reserve Bank of Australia's fourth interest rate increase of the year, which lifted the official cash rate to its highest level in about 15 years.
The benchmark S&P/ASX 200 index rose 29.6 points, or 0.34%, to finish at 8,709.3. The gain added to a modest advance on Monday, when the index closed at 8,679.7, and helped the market edge further away from three-month lows.
Trading was choppy for much of the session. The index hovered near flat in the morning and briefly dipped into negative territory after the central bank announced its decision, before recovering into the close.
RBA lifts cash rate to 4.60%
The Reserve Bank of Australia raised its cash rate target by 25 basis points to 4.60% from 4.35%, a move widely expected by economists and financial markets. The unanimous decision marks the central bank's first increase after holding rates steady at its previous two meetings and brings total tightening this year to 100 basis points.
In its statement, the RBA's Monetary Policy Board said inflation remained elevated and that some of the upside risks it identified in August were now materializing. The board noted that the conflict in the Middle East had broadened and that global energy prices were much higher than assumed in its August forecasts.
The board also pointed to demand linked to artificial intelligence, which it said was driving rapid growth in global prices for technology-related goods, while Australian businesses continued to face cost pressures.
The board said a further tightening in financial........