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Stocks close 1% higher after RBA meeting

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The Australian share market is over one per cent higher, ending a six session losing streak, after the Reserve Bank left the door open for a another rate cut.

The central bank has left the cash rate at a record low of two per cent for a sixth straight month, but it seems more willing to consider a cut than in previous months.

IG Market analyst Angus Nicholson said the notable interest rate easing bias in the central bank’s statement is increasing speculation for a rate cut in December or February.

“Expectations for the Reserve Bank to leave rates on hold at their meeting today may also have been feeding through to some positive sentiment on the outlook for the Australian economy,” he said.

“After a big sell off yesterday, the ASX has rebounded strongly today.”

Mr Nicholson said the local share market had responded positively to strong overnight leads from US and European equity markets.

High-yielding stocks had a strong performance, with the banks and telcos gaining ground.

The big four banks were all higher, with ANZ up 42 cents to $27.00, Westpac Banking Corporation gaining 69 cents to $31.30, Commonwealth Bank adding $1.36 to $76.46 and National Australia Bank was 48 cents higher at $30.10.

Telstra rose 10 cents to $5.40.

The big miners were mixed, with BHP Billiton adding 22 cents to $23.02 but Rio Tinto fell 15 cents to $50.61 and Fortescue Metals Group dropped two cents to $2.10.

After consecutive days of losses, the big supermarket giants posted gains.

Woolworth was up 30 cents to $23.90 and Wesfarmers gained 23 cents to $39.14.

KEY FACTS

* At the close on Tuesday, the benchmark S&P/ASX200 index was up 73.4 points, or 1.4 per cent, at 5,239.2.

* The broader All Ordinaries index was up 69.9 points, or 1.34 per cent, at 5,291.1.

* The December share price index futures contract was up 99 points at 5,229 with 31,025 contracts traded.

* The price of gold in Sydney at 1700 AEDT was $US1138.00 per fine ounce, down $US4.00 on Monday’s price of $US1,142.00.

* National turnover was 1.9 billion securities worth $4.33 billion.