News: XIJ Australian shares post best monthly gain since March; RBA decision in focus

	  ASX 200 posts best month since March  

	  NZ50 posts best day in nearly 9 months 

	  RBA likely to hike interest rate by 25 bps on Tuesday 

(Updates to close)

Australian shares climbed over 1% on Monday, posting their best monthly gain since March, ahead of a likely modest interest rate hike by the central bank on Tuesday.

The S&P/ASX 200 index (xjo) ended 1.2% higher at 6,863.50. The benchmark gained 6% in October, its best month since March.

"Investors probably have formed an opinion that high inflation and rising interest rates are not impacting economic and corporate growth to the extent it was expected earlier," said Kunal Sawhney, Chief Executive Officer at Kalkine Group.

Data showed that Australian retail sales rose 0.6% in September from August with spending staying surprisingly resilient in the wake of surging inflation and higher interest rates.

However, analysts at Citi noted that higher interest rates and high price growth in food, rents, household energy, and automotive fuel costs are starting to alter household spending patterns. "We continue to expect ongoing interest rate rises to dampen discretionary spending growth in the future," they said in a note.

The resilient spending is one reason the Reserve Bank of Australia (RBA) is considered certain to raise interest rates for a seventh consecutive month at its policy meeting on Tuesday, with a Reuters poll seeing a modest 25 basis point hike.

Financial stocks .AXFJ climbed as much as 1.3% to their highest level since June 6 and led gains on the benchmark. The so-called "big four" banks advanced between 0.6% and 1.3%.

Technology stocks .AXIJ tracked Friday's sharp rise in Wall Street indices to gain 2.6%.

Heavyweight mining stocks .AXMM fell 0.04% on weak iron ore prices.

Gold .AXGD and energy stocks .AXEJ fell 1.7% and 0.4% respectively as bullion headed for its seventh monthly loss and oil prices slipped.

New Zealand's benchmark S&P/NZX 50 index (nz50) rose 1.9% to finish the session at 11,338.43. The benchmark posted its best day since Feb. 2.