The S&P/ASX200 rose 18 points on Tuesday, up 0.19 per cent, to 9,250.6, as the broader All Ordinaries gained 19.6 points, or 0.21 per cent, to 9,443.7.
The top-200 jumped by 25 points shortly after the RBA's unanimous call to hold the official cash rate at 4.35 per cent, but the lead was gone by the close after governor Michele Bullock noted ongoing concerns and left the door open to further hikes.
Analysts were mixed on the tone of Ms Bullock's speech, but some noted another increase had become less likely.
"This was a hold with a dovish edge," Schroders head of fixed income Kellie Wood said.
"The board is still talking tough, but the forecasts suggest it is increasingly confident policy is already restrictive enough to finish the job."
Still, inflation fears were reignited as Brent crude hit $US88 a barrel for the first time since July, as deteriorating US-Iran relations dimmed hopes for a deal to reopen the Hormuz Strait.
Australia's energy sector soared almost four per cent as Woodside and Santos rallied, while refinery operators, coal producers and uranium stocks also advanced.
Non-energy miners gained 0.5 per cent, handing back two-thirds of an early lead as gold, copper and battery minerals producers ran into profit-taking as commodity prices cooled off.
Gold is trading hands at $US4,370 ($A6,195) an ounce after hitting a nearly two-month high early in the session.
The heavyweight financials sector eased roughly 0.4 per cent, as ANZ weighed after it forecasted a deepening housing price slump.
CommBank slipped 0.2 per cent to $173.92 ahead of its hotly anticipated full-year earnings release on Wednesday.
The health care segment surged more than two per cent in a broad-basted rally, buoyed by a dip in risk sentiment and as traders bet on a recovery in the beaten down sector.
Utilities was the third-best performer, up one per cent.
Consumer-facing stocks were mixed, with discretionaries eking a tiny gain, while staples tumbled 1.5 per cent, as Woolworths and Coles weighed.
In company news, Austal rocketed more than 17 per cent after South Korean conglomerate (and 20 per cent Austal shareholder) Hanwha lobbed a $1.7 billion bid for the naval shipbuilder's US business.
It was a tough day for reporting, as SGH, Life360, Amotiv Ltd and Coronado Resources tumbled between 10 and 20 per cent after their financial results disappointed investors.
Helia and Centuria Industrial REIT bucked the trend, clocking gains on the backs of their financial scorecards.
The Australian dollar is buying 70.52 US cents, down from 70.66 US cents on Monday at 5pm AEST and after dipping as low as 70.40 immediately after the RBA decision.
ON THE ASX:
* The S&P/ASX200 rose 18 points, or 0.19 per cent, to 9,250.6
* The broader All Ordinaries gained 19.6 points, or 0.21 per cent, to 9,443.7
One Australian dollar trades for:
* 70.52 US cents, from 70.66 US cents at 5pm AEST on Monday
* 112.28 Japanese yen, from 111.92 Japanese yen
* 61.13 euro cents, from 61.16 euro cents
* 52.22 British pence, from 52.36 pence
* 120.03 NZ cents, from 120.01 NZ cents
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