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 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 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%.

Australian shares snap 4 days of gains on China demand worries

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

Heavyweight mining stocks fell 0.04% on weak iron ore prices. Gold and energy stocks 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 rose 1.9% to finish the session at 11,338.43.

The benchmark posted its best day since Feb. 2.