Australian shares recovered on Tuesday after a brutal sell-off in riskier assets in the previous session, after the central bank held interest rates steady as expected, while reiterating it was not ruling anything in or out to control inflation.

The S&P/ASX 200 index closed 0.4% higher at 7,680.6. The benchmark index had slumped 3.7% on Monday.

The Reserve Bank of Australia kept rates at a 12-year high of 4.35%. Governor Michele Bullock said the bank’s board had discussed raising rates at the meeting, but decided policy was in the right place for the time being.

She ruled out rate cuts in the near term, saying policy had to remain restrictive to bring stubborn core inflation to heel.

The RBA trails other central banks in cutting interest rates. The U.S. Federal Reserve is almost certain to cut rates in September, while the European Central Bank and the Bank of England have already eased policy.

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“The messaging from the RBA did lean on the hawkish side to a moderate degree, however it wasn’t enough to rattle the markets,” said Tim Waterer, a market analyst at KCM Trade.

“Markets have been in a state of flux this week, so I think there was some relief that we didn’t get an overtly hawkish statement.”

Financials rose 0.9%, with the country’s biggest lender Commonwealth Bank of Australia gaining 2.2%.

Real-estate stocks, which are sensitive to rate shifts, rose 1%.

Consumer staples gained 0.3% and healthcare stocks rose 0.2%.

Energy stocks fell 2%, with sector heavyweight Woodside Energy dropping more than 5% to its lowest since February 2022, after investors questioned the timing and impact of its $2.35 billion acquisition of a clean ammonia project in Texas.

In New Zealand, the benchmark S&P/NZX 50 index fell 0.2% to 12,245.76.