Wide gains for Australian shares ahead of RBA rate call

Business, Markets

The Australian share market was up across the board at midday ahead of the Reserve Bank's decision on interest rates, with traders expecting little or no change from the afternoon announcement.

At noon AEDT on Tuesday the benchmark S&P/ASX200 was up 67.4 points, or 0.88 per cent, to 7,767.7, while the broader All Ordinaries had gained 60.7 points, or 0.76 per cent, to 8,004.3.

The RBA is widely expected to keep rates on hold at 4.35 per cent for a fifth consecutive meeting on Tuesday afternoon as the board focuses on returning inflation back to target in a reasonable time frame.

More than 35 experts polled by Finder predict no change to the cash rate in June.

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Market expectations of an unchanged rate remain at 95 per cent on the ASX rate indicator.

IG market analyst Tony Sycamore expects the tone of the meeting to remain neutral, as it had in the last meeting, when the board said nothing is ruled "in or out".

Every sector was up at midday with utilities the biggest gainer, rising 1.6 per cent as Origin Energy added 2.3 per cent.

In the heavyweight mining sector, Fortescue had sunk 4.7 per cent to a seven-month low of $21.94, with the Australian Financial Review reporting that an unnamed institutional investor had sold off a monster $1.1 billion stake in Andrew Forrest's company after Monday's closing bell.

Elsewhere in the sector, BHP was up 0.5 per cent, Rio Tinto had gained 0.7 per cent and goldminer Newmont had added 2.2 per cent.

CBA's 1.4 increase led the way for the four big banks, with NAB rising 1.1 per cent, ANZ gaining 0.6 per cent and Westpac up 0.5 per cent.

The Australian dollar was buying 66.12 US cents at noon, from 65.94 US cents at Monday's ASX close.

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