Australian Shares Rise as US Rate Hike Eases Debt Market Jitters

The Australian share market has risen modestly in response to a US interest rate hike, which brought relief to bond investors and eased debt market jitters.

A widely-tipped increase of interest rates by the Federal Reserve was accompanied by warnings of further monetary tightening ahead, but still provided reassurance that the central bank is serious about tackling above-target inflation.

Betashares chief economist David Bassanese noted that long-term bond yields remained relatively steady overnight, which may give investors some comfort in the face of potential rate rises.

The hike could put pressure on the Reserve Bank to raise Australia's official cash rate again, with markets already leading towards a hike on September 29.