The sharemarket climbed for the third session on Thursday as a record copper price helped offset a sell-off in property after bond traders priced out any chance of another rate cut from the Reserve Bank of Australia this cycle.

The S&P/ASX 200 index closed 23.2 points higher, or 0.3 per cent, at 8618.4 in a choppy session, despite an increasing probability of higher borrowing costs in the coming months. Bond traders are now pricing in a 17 per cent chance the central bank will lift the cash rate as early as February.

RBA meeting ‘live’

That’s after data showed Australian household spending in October soared by the most in two years, validating the RBA’s concerns about inflation, which is already well outside of its target band.

“The consumer is in much better shape with higher income, higher savings, higher house prices,” said Jo Masters, chief economist at Barrenjoey, who is tipping a rate increase in May and again in August. She believes the RBA February meeting is live to a possible rate increase.

The RBA is widely expected to hold the cash rate for the fourth consecutive meeting at 3.6 per cent when it meets next week.

“The message is loud and clear: the bias is firmly towards higher policy rates,” warned Ben Wiltshire, global rates trading strategist at Citi. He noted that the market had gone from fully pricing an interest rate cut by August 2026 just one month ago, to fully pricing a rate increase by August 2026.

On the ASX, five of the 11 sectors closed higher. Materials did much of the heavy lifting as copper hit a record high in London and topped 91,400 yuan ($19,566) in Shanghai on concerns that potential US tariffs would fuel a global supply squeeze.

The surge pushed index heavyweights sharply higher. Rio Tinto, which is holding an investor day, hit a record high of $140.58. BHP soared 3.6 per cent to $44.55, its highest level since October 2024.

South32 leapt 3.9 per cent to $3.51. Sandfire Resources 3 per cent to $16.83, and Capstone Copper 8 per cent to $14.25.

ANZ led the big banks higher, climbing 1.7 per cent to $35.32. Commonwealth Bank rose 0.8 per cent to $152.22 and Westpac 0.7 per cent to $37.66. Bendigo Bank was up 0.5 per cent amid plans to acquire RACQ Bank’s book of $2.7 billion in loans and $2.5 billion in deposits.

The prospect of higher borrowing costs weighed on the real estate sector, which slumped 2.1 per cent. Goodman Group dropped 2.7 per cent to $29.36, Stockland 1.8 per cent to $5.82 and Scentre 1.9 per cent to $4.11. Among the retailers, JB Hi-Fi dropped 2.1 per cent to $96.09, and Temple & Webster 2.4 per cent to $14.01.

Stocks in focus

In company news, BetMakers advanced 5.7 per cent to 18.5¢ as it signed an exclusive five-year agreement with Betfair to provide technology for the launch of premium wagering brand CrownBet.

Vulcan Energy Resources tumbled 33 per cent to $4.1 after raising €398 million ($710 million) in shares at $4 to finance a renewable energy project.

Regis Healthcare fell 3.9 per cent to $7.64 on news it agreed to sell its Ayr and Home Hill aged care homes in Queensland to not-for-profit provider Ozcare.