Australian stocks are staging a huge rally on the RBA rate cut

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The Australian share market has surged 1% higher as the RBA announced a record low official interest rate of 2.25%.

The S&P ASX 200 is up 1.52% to a post-GFC high.

“This is the local market’s highest level since May 2008 and momentum is overwhelmingly positive right now,” says IG’s Stan Shamu. “Predictably, the yield plays are leading the gains with banks rallying (CBA at a fresh record high), while there are also solid gains for property stocks and some of the consumer names. The energy sector was already doing well on the back of the recent gains in oil and has managed to extend gains along with the rest of the market.”

The major banks and big mining companies led the way as investors saw better returns from lower financing costs.

The ANZ bank was up 1.71% to $33.94, the Commonwealth up 0.88% to a record $90.47, and BHP was trading 3.24% higher to $30.56.

Among energy stocks, Woodside was up 2.92% to $35.66.

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