The S&P/ASX200 edged 29.6 points higher on Tuesday, up 0.34 per cent, to 8,709.3, as the broader All Ordinaries gained 35.9 points, or 0.41 per cent, to 8,886.6.
A modest, late afternoon advance came despite a widely anticipated interest rate hike, after Reserve Bank governor Michele Bullock said the central bank was in no rush to lift the official cash rate again on Melbourne Cup Day, November 3.
"The point I want to make is that we've got to see how these four interest rate rises feed through," Ms Bullock told reporters.
"What we're observing at the moment, what we'll observe tomorrow, is a (consumer price index) number that happened a month ago."
Five of 11 local sectors ended the session higher, with many losing segments narrowing their losses into the close as the governor's press conference unfolded.
Raw materials extended an early rebound to push more than one per cent higher, tracking with solid leads from BHP and Rio Tinto as copper prices recovered from a recent dip and as China's government signalled more economic stimulus.
Gold stocks broadly improved as the precious metal clawed higher to $US4,143 ($A5,931) an ounce, after selling off in recent weeks amid spiking global bond yields and a stronger greenback.
Energy stocks narrowed earlier losses but the sector ended the session 0.7 per cent lower, with Brent crude trading just below $US107 a barrel as Qatari mediators prepare for separate peace talks with US and Iranian officials.
Financials crept lower as CommBank slipped 0.8 per cent to $150.27 and its remaining big four competitors traded roughly flat.Â
Consumer discretionary stocks doubled their morning gains to end the session 0.8 per cent higher, as traders tempered their worst-case scenarios on interest rates and the spending outlook.
The RBA was likely at the end of its rate hiking cycle but the risk of further increases remained, AMP chief economist Shane Oliver said.
"However, by the time the next RBA meeting comes around in November there is likely to be more evidence of a cooling economy, sharply falling home prices, a softer jobs market and rising recession risks," Dr Oliver said.
"So we don't think a second hike, let alone a third, will be necessary."
In company news, shareholders have launched a class action against Cochlear over allegations of misleading profit guidance.
Goodman Group has scrapped a planned $1.2 billion data centre in Sydney following community backlash.
The Australian dollar is buying 69.93 US cents, down from 70.18 US cents on Monday at 5pm as November rate hike fears eased.
ON THE ASX:
* The S&P/ASX200 rose 29.6 points, or 0.34 per cent, to 8,709.3.
* The broader All Ordinaries gained 35.9 points, or 0.41 per cent, to 8,886.6.
One Australian dollar trades for:
* 69.93 US cents, from 70.18 US cents at 5pm AEST on Monday
* 110.12 Japanese yen, from 110.52 Japanese yen
* 61.55 euro cents, from 61.68 euro cents
* 52.81 British pence, from 52.99 pence
* 123.69 NZ cents, from 123.87 NZ cents
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