Sydney, February 3, 2026, 21:54 AEDT — The market has closed.
- The S&P/ASX 200 climbed 0.89%, closing at 8,857.10 points
- After Monday’s dip, miners, tech, and banks drove the rebound
- After the RBA raised the cash rate to 3.85%, investors adjusted their expectations for the near-term rate trajectory
Australian shares ended Tuesday on a positive note, with the S&P/ASX 200 rising 0.89% to 8,857.10 points. The index fluctuated between 8,778.60 and 8,896.60 during the session.
The Reserve Bank of Australia’s shift back toward tighter policy changed the calculus for rate-sensitive stocks. Miners remain the market’s ballast for now, but higher rates risk cutting into consumer spending and property values.
Gold miners and major resource stocks took the lead, with technology and banks also making gains. Besa Deda from William Buck noted, “With the RBA entering a rate-hiking cycle, gains in share markets will be more uneven.” Tim Waterer at KCM Trade warned the higher-rate environment “could leave stocks swimming against the tide.” Northern Star Resources and Evolution Mining climbed, while BHP Group and Rio Tinto extended their gains. Indo Premier
The RBA lifted its cash rate target by 25 basis points, bringing it to 3.85%—marking its first increase in two years. The central bank noted the economy was expanding quicker than anticipated, with inflation expected to remain above target for a while.
In its latest Statement on Monetary Policy, the central bank raised its growth and inflation forecasts, assuming a total of 60 basis points in rate hikes this year. It expects underlying inflation — measured by a “trimmed mean” that excludes extreme price changes — to climb to 3.7% by June, up from 3.4%. Headline inflation could hit 4.2% mid-year as electricity rebates end. Reuters
Commonwealth Bank of Australia, Westpac, National Australia Bank, and ANZ Group responded to the policy shift by hiking variable home-loan rates by 25 basis points. These increases are set to kick in by mid-February.
Equity investors know the drill: banks often gain from rising rates, yet the wider economy risks faltering if consumers tighten their belts. The coming days will reveal if Tuesday’s rally marks a genuine turnaround or merely a blip amid volatile trading.
The risk here is a tougher rate outlook coinciding with murkier global data. The U.S. Bureau of Labor Statistics announced a delay for January’s employment report due to a partial government shutdown, taking away a crucial benchmark for rates markets.
On Friday, traders will track a series of ABS releases, covering building approvals, December’s international trade figures, and some living cost indexes.
Earnings will drive the next major move. CSL plans to release its half-year results and declare an interim dividend on February 11.
Related articles: ASX:RIO
