Aust stocks bounce ahead of RBA decision

The Australian share market opened slightly higher, with most sectors posting gains as investors await the Reserve Bank of Australia's (RBA) latest interest rate decision.

At 1010 AEST on Tuesday, the benchmark S&P/ASX200 index was up 49.3 points, or 1.24 per cent, at 4,034.3, while the broader All Ordinaries index was up 47.7 points, or 1.18 per cent, at 4,081.1.

On the ASX 24, the June share price index futures contract was up 45 points at 4,042, with 8,539 contracts traded.

The local market received a mixed lead from Wall Street, with a negative report on new US factory orders in April weighing on the Dow Jones Industrial Average.

The Dow closed 17.11 points, or 0.14 per cent, lower at 12,101.46, while the broader Standard & Poor's 500 firmed 0.14 points, or 0.01 per cent, to 1,278.18.

The tech-laden Nasdaq composite gained 12.53 points, or 0.46 per cent, to 2,760.01, supported by a 3.1 per cent jump in Amazon's shares, and a 3.4 per cent lift for shares in Starbucks.

The local market made broad-based gains in quiet trading ahead of the RBA's interest rate announcement, due at 1430 AEST, Jamie Spiteri, senior equities dealer at Shaw Stockbroking, said.

"We're just seeing the market get re-marked upwards, highlighting the fact that it was oversold (on Monday) because of all the short-term uncertainties that exist at present."

Economists are split on whether the RBA will leave the cash rate at 3.75 per cent, lower it by 25 basis points or cut it by half a percentage point.

Materials stocks made solid gains, with market heavyweight BHP Billiton adding 42 cents, or 1.37 per cent, to $31.17, and Rio Tinto gaining 93 cents, or 1.76 per cent, to $53.83.

Woodside Petroleum led the energy sector higher, gaining 64 cents, or 2.07 per cent, to $31.51.

Major banks and financials stocks also climbed higher, with ANZ Banking Group leading the big four banks up after gaining 39 cents, or 1.87 per cent, to $21.26.

Telstra's stock was steady at $3.66.

Consumer staples and discretionary stocks also bounced, with department store owner Myer Holdings up two cents, or 1.09 per cent, to $1.86 and Billabong surging 5.5 cents, or 3.06 per cent, to $1.855.

Shares in Qantas Airways bucked the positive trend, nosediving 21 cents, or 14.79 per cent, to a record low of $1.21.

The national carrier announced it expects a fall of up to 91 per cent in its full year underlying profit due to the troubled European economy and soaring fuel costs.

By 1032 AEST national turnover was 257 million securities, worth $536.7 million, with 422 securities trading up, 151 down and 222 unchanged.

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