The sharemarket climbed on Tuesday after the Reserve Bank of Australia struck a dovish tone on monetary policy and followed through with a widely expected 25 basis point interest rate cut.

The S&P/ASX 200 Index rose 0.6 per cent, or by 48.2 points, to close at 8343.3 after the RBA cut interest rates for the second time in a year, in line with market expectations. Eight of the bourse’s 11 sectors closed in the green. The All Ordinaries rose 0.6 per cent.

A rebound in US shares overnight, that pushed the S&P 500 to the brink of a bull market, set the tone for the ASX 200 in the morning session before the RBA cut its benchmark rate by 0.25 of a per cent to 3.85 per cent, taking the cash rate below 4 per cent for the first time since 2023.

RBA governor Michele Bullock said the decision had been “unanimous”, but revealed in the press conference that a 50 basis point cut had been considered and said policymakers were prepared to “take further action” given uncertainty in the global outlook created by trade tariffs.

The yield on the rate-sensitive three-year Australian bond fell 20 basis points, and the Australia dollar fell.

“The RBA was particularly dovish,” BlackRock’s head of APAC investment strategy Thomas Taw said. “The RBA is now confident that the economy and labour market are strong and inflation is under control – so they’re ready to try and spur growth.”

On the ASX 200, banks, technology and real estate – stocks that are typically sensitive to interest rates – advanced. Commonwealth Bank lifted 0.6 per cent to $172.43, closing at a fresh record. National Australia Bank was up 1 per cent to $37.21 and Macquarie rose 2 per cent to $208.09.

Technology heavyweight WiseTech closed up 2.7 per cent at $102.07, while property stocks were a sea of green. Goodman Group jumped 1.8 per cent to $32.20 and Vicinity Centres 3 per cent to $2.42.

Stocks on the move

Profit-taking hit typically defensive utilities stocks as investors piled in to banks and property names – Contact Energy fell 3.4 per cent to $8.29. Gold stocks were also heavily sold as spot gold retreated, nearing $US3200 an ounce, sending Newmont down 1.4 per cent to $78.31.

In corporate news, TechnologyOne leapt 11.3 per cent to $36.76 after the software giant lifted its interim dividend 30 per cent and reported strong revenue growth in the first half.

Telstra rose 2.2 per cent to $4.66 after announcing it would raise prices for most of its phone and internet plans by between $3 and $5 per month as it tries to boost profits.

Kiwi insurer Tower advanced 4.2 per cent to $1.36 after reporting its interim profit jumped 53 per cent in the half-year to March, hitting $NZ49.7 million ($45.6 million).

And Kogan.com slumped 8.9 per cent to $4.12 after telling investors it did not expect its online business Mighty Ape to return to profitability until 2026 following a problematic web platform upgrade.