Australian shares close higher ahead of widely expected RBA rate hike

By Reuters News

By Kumar Tanishk

Sept 28 (Reuters) - Financials led broad gains in Australian shares on Monday as investors braced for a near-certain central bank rate hike due to come in a day later.

The benchmark S&P/ASX 200 index .AXJO rose 0.2% to 8,679.70 points after falling 0.4% on Friday. The benchmark remained nearly 1.6% below its 200-day moving average.

The Reserve Bank of Australia (RBA) is widely expected to hike rates by 25 basis points to 4.60% on Tuesday, a Reuters poll found. Swaps are pricing in about 40 basis points of further tightening after that. 0#AUDIRPR

A rate hike is largely baked into Australian equities, putting the spotlight on whether the RBA telegraphs further tightening or pivots to a more cautious, data-led tone, KCM Trade’s chief market analyst Tim Waterer said.

"Any hint of a more hawkish path could weigh on rate-sensitive sectors, while a measured message may help the market hold recent levels. A more hawkish-sounding RBA on Tuesday could quickly put a spanner in the works for equity momentum."

Leading gains, rate-sensitive financials .AXFJ rose 1.2%, posting their best session in about one and a half week, with the big four banks gaining between 0.5% and 1.6%.

Consumer staples .AXSJ climbed 0.8%, led by a 1% rise in country's top groccer Woolworths WOW.AX.

Healthcare stocks .AXHJ rose 1.5% to over a month high, while real estate firms .AXRE gained 0.5%.

Capping gains, miners fell for a third straight session slipping 1.5% as iron ore prices declined. Mining giants BHP BHP.AX, Rio Tinto RIO.AX and Fortescue FMG.AX fell between 0.7% and 1.5%. IRONORE/

Gold miners .AXGD dropped 1.6%, tracking weaker bullion prices. However, top gold miner Northern Star Resources NST.AX advanced 6.2% on rejecting a takeover proposal from South Africa's Gold Fields GFIJ.J.

Across the Tasman Sea, New Zealand's S&P/NZX 50 index .NZ50 rose 0.1% to 13,830.68 points.

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