The winners and losers of an RBA rate hike
Banks, insurance companies and miners are tipped to be among key winners on the ASX if the Reserve Bank raises official interest rates next year, a scenario money markets have priced in after higher-than-expected inflation figures.
As the Reserve Bank prepares to hold its final board meeting of 2025 on Tuesday, markets are predicting the current cash rate of 3.6 per cent will not change this year, with some betting on an increase in rates in 2026.
Experts said that any such increase in interest rates could help to widen banks’ profit margins, while insurance companies also tend to make higher returns from their investment portfolios when interest rates rise.
Miners could also be viewed more favourably in an environment of rising rates, market watchers said, while adding that real estate stocks and infrastructure were more likely to struggle.
Michael McCarthy, a market strategist at online share trading platform Moomoo, said he thought interest rates would be kept on hold on Tuesday and rise early in the new year, and that banks and companies with lower debt or clean balance sheets would be best positioned.