ASX 200 closes 1.2pc higher; RBA governor says 2022 rate hike 'plausible'

ASX closed 1.2 per cent higher as RBA governor tells borrowers to prepare for higher rates. Telstra to spend $1.6bn on fibre project, Rangers clean-up faces $1.2bn blowout and Fortescue's latest hydrogen buy.

Investors await a key speech by Philip Lowe on Wednesday where he will discuss the year ahead. Picture: NCA NewsWire / Jeremy Piper

Welcome to the Trading Day blog for Wednesday, February 2. The Australian share market closed 1.2 per cent higher, led by energy, materials and financial stocks. RBA governor Philip Lowe conceded a rate hike is "plausible" this year. It comes as Telstra plans to invest $1.6bn in a new fibre network and costs blowout for the clean up of Rangers. 

The benchmark S&P/ASX 200 closed 1. 2 per cent higher at 7088 following solid gains offshore. Investors piled into energy, materials and financial stocks.

The Dow Jones Industrial Average closed 0.8 per cent higher, the S&P 500 by 0.7 per cent and tech-heavy Nasdaq added 0.8 per cent.

Iron ore is mostly unchanged overnight at $US141.75 a tonne. The US Nymex crude price is up 0.1 per cent to $US88.20 a barrel, according to CommSec.