* RBA hikes cash rate by 50 bps to 1.35%
* Benchmark index extends gains
* Gold stocks lead advance
July 5 (Reuters) - Australian shares closed higher on
Tuesday, lifted by commodity stocks, while the Reserve Bank of
Australia raised its cash rate by 50 basis points (bps) and
offered a less hawkish view than what some investors had hoped
for.
The country's central bank raised its cash rate for a third
straight month to 1.35% and flagged more tightening ahead as it
struggles to contain surging inflation.
The S&P/ASX 200 index rose 0.3% to 6,629.30 at the
close of trade, extending its gain from Monday's 1.1% rise.
"Today's 50 bps (hike) was in line with expectations and
with quarterly inflation numbers out this month, there is a case
for more rises coming in July and August," Peter Esho,
co-founder at Wealthi, said.
Official data on consumer price inflation for the second
quarter is due on July 27 and is expected to show another
alarming rise to 6% or more levels not seen since a national
sales tax was introduced back in 2000.
"We're of the view that the cash rate will rise to around
2%-2.25% by the end of the year," he added.
Gold stocks led gains to close up 2.4%, tracking
rise in gold prices. Sector heavyweights Northern Star Resources
and Newcrest Mining climbed 2.4% and 1.35,
respectively.
Energy stocks advanced 2.2% after concerns around
tight supply of the commodity shadowed fears of a looming global
recession.
Sector majors Woodside Energy Group and Ampol
advanced 3.8% and 1.1%, respectively.
Financials erased losses to climb 0.3% after the
central bank's announcement. However, shares of three of the
so-called "Big Four" banks ended lower, while Westpac
was flat.
New Zealand's benchmark S&P/NZX 50 index rose 0.9%
to finish the session at 10,965.17 points.
(Reporting by Tejaswi Marthi in Bengaluru; editing by
Uttaresh.V)