Australian shares climbed on Wednesday by their most in more than two months as expectations grew that the central bank would cut interest rates in two weeks.
Westpac <WBC.AX> economist Bill Evans said he expects the Reserve Bank of Australia (RBA) to further cut rates from a record low of 0.25%, sending the Australian dollar and three-year bond yields lower.
The view follows a speech by RBA Deputy Governor Guy Debelle on Tuesday where he signalled the likelihood of more monetary easing, and after National Australia Bank <NAB.AX> economists said they see a "significant risk" of a cut to the cash rate.
Sydney's ASX 200 index <.AXJO> closed 2.4% higher, snapping four straight sessions of falls.
"Westpac has now joined the chorus of people talking about a rate cut, which seems to have got the market all excited, especially in the over-sold sectors like banks," said Henry Jennings, a senior analyst and portfolio manager at Marcustoday Financial Newsletter.
Almost all stocks in the financial sector <.AXFJ> closed higher with the big-four banks adding between 1.9% and 2.9%.
Service Stream <SSM.AX> was the top gainer on the benchmark, jumping around 14%, after the National Broadband Network announced plans to upgrade infrastructure.
Tech stocks <.AXIJ> tracked an overnight rally in their U.S. counterparts and closed 2.7% higher. [.N]
Buy-now-pay-later sector bellwether Afterpay <APT.AX> climbed 2.9%, while smaller peer Sezzle <SZL.AX> jumped on a partnership with a unit of Ally Financial <ALLY.N>.
In New Zealand, the benchmark index <.NZ50> ended 0.8% higher at 11,704.62.
In a widely expected move, the central bank held its official cash rate at a record low, but hinted at further easing and warned the economy may need support for a long time as the world grapples with the coronavirus pandemic.
Local shares of Australia and New Zealand Banking Group <ANZ.NZ> and Westpac <WBC.NZ> added 0.8% and 0.4%, respectively.
(Reporting by Deepali Saxena in Bengaluru; Editing by Subhranshu Sahu)
