THE Australian share market closed stronger on Tuesday and the Australian dollar also moved up.
The benchmark S&P/ASX200 index closed up 18.3 points, or 0.4 per cent, at 4591.6 points, while the broader All Ordinaries index gained 17.9 points, or 0.39 per cent, to 4597.2 points.
On the Sydney Futures Exchange at 1615 AEDT, the December share price index contract was 24 points higher at 4607 points on a volume of 26,846 contracts.
The Reserve Bank of Australia (RBA) announced an increase of a quarter of a percentage point in the interbank overnight cash rate.
The cash rate will rise to 3.25 per cent from 3.00 per cent, where it has been since a series of cuts ended in April this year.
IG Markets research analyst Ben Potter said the market lost early gains that had been fuelled by a stronger Wall Street and commodities markets, as the RBA's decision on interest rates loomed.
However, the rate rise was not expected to have a lasting effect on shares.
The big four banks ended mixed. ANZ added 20 cents to $23.30, Westpac gained 51 cents to $25.18, National Australia Bank lost 11 cents to $29.09 and Commonwealth Bank fell 18 cents to $49.50.
Property companies ended mostly lower, although Westfield gained 24 cents to $13.30.
Stockland dropped four cents to $3.83, Mirvac lost 1.5 cents to $1.565 and GPT Group fell 0.5 cents to 63 cents.
BHP Billiton added 33 cents to $36.65 and Rio Tinto gained 88 cents to $57.73.
Fortescue Metals was one of the worst performers, shedding 19 cents, or 5.29 per cent, to $3.40.
Energy stocks were mixed after New York's benchmark crude oil price rose.
Meanwhile, the Australian dollar has closed higher after the Reserve Bank of Australia (RBA) lifted the overnight cash rate for the first time in 19 months.
At 1700 AEDT, the Australian dollar was trading at $US0.8875/78, up from Monday's close of $US0.8734/39.
During the local trading day it travelled between $US0.8761 and $US0.8877.
Nomura Australia chief economist Stephen Roberts said the unit was boosted by the central bank's decision during Tuesday's domestic session, to lift the cash rate to 3.25 per cent, up from three per cent.
It was the first time the Bank had lifted rates since March 2008.
AAP
