RBA Set to Hike Rates: Which ASX Sectors Face the Biggest Impact?

RBA’s expected rate hike could shift ASX winners and losers

The Reserve Bank of Australia meets on February 3, 2026, and for the first time in over a year, a rate hike looks likely. With the cash rate currently sitting at 3.60%, economists at CBA, Westpac, and ANZ expect the RBA to lift rates to 3.85%, while NAB has adopted a more hawkish stance, forecasting a peak of 4.10% following a second hike in May. The reason is simple: inflation remains stubbornly above target, and the central bank needs to act.

For investors, this shift matters. Higher interest rates don’t affect all stocks equally. Some sectors will feel the pain, while others could benefit. Understanding these dynamics now could help you position your portfolio before the decision drops.

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Why the RBA Is Likely to Raise Rates

Trimmed mean inflation rose to 3.3% in the 12 months to December, overshooting the RBA’s own 3.2% forecast and marking two consecutive quarters of upside surprises. With unemployment falling to 4.1% in December from 4.3% in November, confirming that the labour market remains tighter than the RBA anticipated, the economy isn’t slowing enough to bring prices down on its own.

In our view, a 25-basis-point hike looks almost certain. The key question now isn’t whether rates will rise, but whether we’ll see further hikes later in the year.

Sectors That Could Struggle

Consumer Discretionary: Retailers face the most obvious headwind. When borrowing costs rise, households tighten their belts. Companies like Super Retail Group and JB Hi-Fi rely heavily on consumer confidence, which typically falls when mortgage repayments go up.

REITs and Property: Real estate investment trusts tend to underperform when rates rise. Higher bond yields make property trusts less attractive compared to fixed-income investments. Most REITs also carry significant debt, which means margin pressure when borrowing costs increase.

Tech and Growth Stocks: Companies valued on future earnings face valuation compression when rates rise. Higher rates increase the discount applied to future profits, making growth stocks look less attractive. The ASX tech sector fell nearly 2% in recent trading as rate hike expectations solidified.

Sectors That Could Benefit

Banks: Higher rates can help bank earnings. The big four benefit from wider net interest margins, the difference between what they charge borrowers and pay depositors. ANZ and NAB are well-positioned if the RBA follows through.

Resources: Mining stocks tend to perform well during rate hike periods. A more hawkish RBA, combined with potential US Fed rate cuts, could support a stronger Australian dollar, which historically benefits resources. Northern Star Resources and Sandfire Resources offer exposure to this theme.

Consumer Staples: People still need to eat regardless of interest rates. Woolworths and Coles tend to hold up better than discretionary retailers when budgets come under pressure. This defensive positioning makes staples attractive in a rising rate environment.

The Investor’s Takeaway

A February rate hike appears likely, and the market has started pricing this in. For investors, the key is not to panic but to understand where the opportunities and risks lie.

If you hold significant exposure to REITs or consumer discretionary stocks, now might be a good time to review those positions. Banks and resources could offer better risk-reward in the months ahead.

The RBA decision drops at 2:30 PM AEDT on February 3. Staying informed and positioned appropriately will serve you better than reacting after the fact.