Australian shares have reversed an early loss to end higher after signs of economic pressure prompted a dovish repricing on the interest rate outlook.
The S&P/ASX200 rose 53.8 points on Tuesday, up 0.6 per cent to 8,947.8, as the broader All Ordinaries gained 48.2 points, or 0.53 per cent, to 9,112.
In a mostly hawkish speech to the Anika Foundation, Reserve Bank governor Michele Bullock noted while demand growth was moderating as expected after three cash rate increases in 2026, housing and jobs market conditions had eased more steeply than predicted.
Market expectations for another interest rate hike by year's end were pushed out to March 2027, boosting local stocks with consumer cyclicals leading the charge.
The raw materials sector missed the party, tumbling 1.4 per cent as commodity prices wavered.
The Australian dollar is buying 69.67 US cents, down from 70.06 US cents on Monday at 5pm.
