The S&P/ASX 200 index ended 0.9% higher at 6,824.6 points and recorded a third consecutive session of gains.
RBA governor Philip Lowe, in a speech in Canberra, reiterated the bank’s stance to maintain cash rate at 0.1% and insisted the country will need to maintain “very significant monetary support” for several years.
Lowe’s comments came a day after the RBA announced it had expanded its bond-buying program by another A$100 billion to support an economic recovery.
“There were no big surprises from the speech today. I think the RBA just wanted to make it clear that interest rates will be on hold for a number of years,” said Steven Daghlian, a market analyst at CommSec.
On Friday, the governor will address the house of representatives economics committee and the quarterly statement on monetary policy will also be released.
Broader sentiment was boosted as Wall Street rallied overnight on renewed hopes for U.S. President Joe Biden’s proposed $1.9 trillion pandemic relief package, and strong corporate earnings in the United States.
Financial stocks closed at their highest in 11 months, with Australia and New Zealand Banking Group rising 2.1% and all other “Big Four” banks also seeing gains.
Energy stocks gained following a rise in oil prices on expectations oil stocks will return to ‘normal’ levels this year.
Santos rose to a one-week high, while Woodside Petroleum gained 0.8%.
By contrast, miners shed 1.2% as weak iron ore demand in China pushed prices lower, with the world’s largest miner BHP closing 2.2% lower.
New Zealand’s benchmark S&P/NZX 50 index edged 0.4% higher to 13,091.21 points, as the country’s unemployment rate dropped to 4.9% in the fourth quarter, beating analyst expectations.
