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Australian shares jump to 5-month high after rate cut

SYDNEY, Oct 2 (Reuters) - Australian shares rallied 1 percent on Tuesday to their highest close in five months after the central bank cut its main cash rate in a bid to bolster growth in the face of weak commodity prices and global uncertainty.

The Reserve Bank of Australias cut interest rates by a quarter point to a three-year trough of 3.25 percent on Tuesday, saying a darker global background, falling export prices and a high currency had all dimmed the economic outlook at home.

.

Growth outlook for next year also looked a little weaker, while inflation was likely to remain contained within its target.

The benchmark S&P/ASX 200 index

rose 44.4 points to 4,433, its highest close since early May, led by financials and miners. The benchmark ended flat on Monday.

"The easing that's been delivered has been received positively," said Damien Boey, equity strategist at Credit Suisse.

"The whole market is going up on the back of it, so it kind of tells us that people are looking at the easing as part of this coordinated easing that's happening globally.

Westpac

led gains among the big banks, rising 0.9 percent to A$25.16.

Among the major miners BHP Billiton

jumped 1.3 percent and rival Rio Tinto gained 1.2 percent.

Defensive stocks also rallied, with Australia's biggest phone company Telstra

up 1 percent, blood products maker CSL rising 0.4 percent and supermarket retailer Wesfarmers lifting 1 percent.

"The RBA is hoping that a reduced rate will shield us from a slowing China and the European debt crisis whilst keeping or domestic growth robust," said Ben Taylor, sales trader at CMC Markets.

Qantas Airways

jumped 2.5 percent to A$1.22 after it moved to strengthen its air cargo network with the acquisition of 100 percent of the air freight business Australian Air Express.

New Zealand's benchmark NZX 50 index

finished 1.1 percent or 41.2 points higher at 3,871.3

(Reporting by Thuy Ong; Editing by Sanjeev Miglani)

((thuy.ong@thomsonreuters.com)(+61 2 9373 1236))

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