* ASX 200 posts strongest close since Dec 2007
* Initial caution over U.S. Fed meet smashed by RBA rate-cut plans
* Trading volumes high ahead of qtrly futures expiry date (Updates to close)
June 18 (Reuters) - Australian shares closed at their highest in more than 11 years on Tuesday as an indication of future policy easing by the country’s central bank triggered strong buying.
The S&P/ASX 200 index rose 0.6% or 39.1 points to 6,570.0 at the close of trade. The benchmark fell 0.4% on Monday. Trading volumes were at their highest in nearly three months, ahead of the quarterly futures expiry later in the week.
While caution ahead of a two-day U.S. Federal Reserve policy meeting prompted early defensive buys into healthcare and gold stocks, dovish cues from the Reserve Bank of Australia (RBA) around midday pushed most sectors to end stronger.
Minutes of the RBA’s latest meeting, which was when the bank had cut its benchmark interest rate, showed that the bank believed further interest cuts were necessary to boost Australia’s flagging economy.
Financial stocks contributed to most gains on the benchmark, with Commonwealth Bank of Australia, the country’s largest lender, closing 1.6% higher.
Healthcare stocks closed at their highest level in more than nine months, with CSL Ltd, the fifth largest stock on the ASX 200, ending 1.8% higher. The healthcare subindex ended up 1.3%.
Gold stocks rose 1.5%, with Newcrest Mining , the country’s largest gold producer, up 1.1%. Gold miners have benefited from recent risk-aversion.
Australia’s number-two grocer, Coles Group, closed 3.5% higher after it outlined plans to cut A$1 billion ($685 million) in costs over the next four years.
Map technology developer Nearmap Ltd was the largest intraday gainer on the ASX 200, closing 9.5% higher having garnered increasing broker interest over the past week.
New Zealand shares ended slightly higher as gains across utilities and telecommunications were offset by a drop in heavyweight consumer stocks.
The benchmark S&P/NZX 50 index rose 0.2% or 21.07 points to finish the session at 10,191.33.
Electricity retailer Meridian Energy ended 2% higher, while a2 Milk dropped 2.7%. (Reporting by Ambar Warrick in Bengaluru; Editing by Simon Cameron-Moore)