The Australian stock market has opened higher following a solid lead from the US and ahead of the Reserve Bank of Australia’s monthly interest rate decision.

RBS Morgans senior private client adviser Bill Chatterton said higher closes on the Dow Jones Industrial Average and S&P 500 in New York had set the tone for today’s local session.

“That’s kind of underpinned things for the day,” he said.

But, he said, trading volumes were likely to remain light on Melbourne Cup Day.

“Usually on that day you don’t get a lot of trade. Melbourne is closed and the whole country goes on a bit of a go slow,” he said.

Mr Chatterton said gains were spread across the market on Tuesday morning, with materials, financials, consumer, energy and industries stocks all higher.

A key event for markets on Tuesday will be the Reserve Bank of Australia’s monthly interest rate decision at 1420 AEDT.

The RBA is widely expected to keep the cash rate on hold at 2.5 per cent, a record low.

The major banks were all stronger, with National Australia Bank 27 cents higher at $35.70, Commonwealth Bank up 56 cents at $76.66, ANZ 35 cents better at $33.86 and Westpac 28 cents stronger at $34.44.

Among the miners, diversified giant BHP Billiton had gained 29 cents to $37.81, while Rio Tinto was up 98 cents at $64.70 and Fortescue was 15 cents, or 2.8 per cent, stronger at $5.47.

Telstra had climbed three cents to $5.17 after the telecommunications giant announced it would list its Chinese internet business Autohome on the New York Stock Exchange.

KEY FACTS

* At 1027 AEDT on Tuesday, the benchmark S&P/ASX200 index was up 37.3 points, or 0.69 per cent, at 5,427.

* The broader All Ordinaries index was up 35.7 points, or 0.66 per cent, at 5,419.9.

* The December share price index futures contract was 31 points higher at 5,411, with 5,700 contracts traded.

* National turnover was 318 million securities worth $372 million.