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The Australian stock market has soared to a new record, with the benchmark index rising above 8,300 points for the first time ever, as NAB predicts a rate cut is just months away.

The S&P/ASX200 index rose 1 percent to 8,331 points at 1:30 pm AEDT on Tuesday.

The broader All Ordinaries index earlier rose 55.4 points, or 0.65 percent, to 8,584.1.

The gains came as NAB raised its forecast for a rate cut by the Reserve Bank of Australia from May 2025 to February next year, citing “the shifting balance of risks to inflation”.

NAB also forecast that interest rates will fall to 3.1 percent in early 2026, with employment remaining strong and GDP growth recovering.

The stock market record overnight followed a strong lead from Wall Street, where the Dow Jones and S&P 500 hit another record high.

“While there was no clear catalyst for last night’s rally, the fundamental story is the same: the US economy is on solid footing, looser monetary policy and fiscal policy await market participants in 2024,” said Capital.com analyst Kyle Rodda. .

Eight of the ASX’s 11 sectors were higher at midday, while energy and utilities were lower and consumer staples were almost flat.

Eight of the ASX’s 11 sectors were higher at midday, while energy and utilities were lower and consumer staples were almost flat.

The heavyweight financial sector was the biggest gainer, up 1.3 per cent, while Westpac and CBA were both up 1.7 per cent, NAB up 1.5 per cent and ANZ up 0.9 per cent.

In the heavy mining sector, BHP rose 1.1 percent, Fortescue 2.3 percent and Rio Tinto 1.6 percent.

The energy sector traded lower after Brent crude fell to a 12-day low of $75 a barrel on bearish economic data from China.

Woodside was down 1.6 percent, Santos was down 1.3 percent and Whitehaven Coal was down two percent.

The Australian dollar bought US67.29c early afternoon on Tuesday.