SYDNEY, Australia – Australia's benchmark stock index rose more than 5 percent Monday in the market's best performance in almost two weeks in anticipation of a central bank rate cut Tuesday.
The benchmark S&P/ASX200 index advanced 203.5, or 5.06 percent, to 4,221.5, while the broader All Ordinaries index rose 190.3 points, or 4.78 percent, to 4,173.
It was the biggest rise for both indices since Oct. 13, and stocks reflecting consumer items and staples performed strongly .
The Reserve Bank of Australia is widely expected to cut the overnight cash rate by half a percentage point to 5.5 percent the bank's board holds its monthly meeting Tuesday.
The bank cut the rate by a full percentage point when it last met on Oct. 8.
It was the share markets' fourth consecutive stronger trading day and the strongest close since Oct. 21.
Macquarie Equities associate director Lucinda Chan said a good lead from Wall Street on Friday, combined with positive sentiment and the anticipation of another cut to interest rates Tuesday pushed the market into positive territory.
"The Australian dollar is also trading firmly at 68 cents as we speak which has added to an overall sense of confidence," she said. Volumes were relatively light on the local bourse given the public holiday in Japan, Chan said.
Consumer staples were the standout sector Monday, with major stocks posting strong gains despite weak September household spending data, Chan said.
"Their rises are unbelievable," she said.
Supermarket chain Woolworths jumped 1.83 Australian dollars ($1.25), or 6.58 percent, to AU$29.63 ($20.27), while agricultural group Wesfarmers leapt AU$2.88 ($1.97), or 13.41 percent, to AU$24.35 ($16.65).
The Australian Bureau of Statistics reported that the 1.1 percent decline in retail sales on a seasonally adjusted basis during September was the biggest monthly fall since April 2005.