Australia's central bank cut its official interest rate by a bigger-than-expected 1 percentage point Tuesday to ease credit concerns amid a global financial turmoil, cheering investors around the region and lifting Australian stocks into positive territory

The cut to 6 percent was the largest by the Reserve Bank of Australia since May 1992. Analysts had expected a half-point reduction.

Australian stocks jumped on the news after opening sharply lower and other Asian markets gained after the move as well. Sydney's benchmark S&P/ASX-200 index was up 2 percent in afternoon trading.

RBA Gov. Glenn Stevens said in a statement that the central bank had judged that a large cut in the cash rate was needed after studying the outlook for global growth and its likely effect on Australia.

"Conditions in international financial markets took a significant turn for the worse in September," Stevens said. "Large-scale financial failures in several major countries were accompanied by serious dislocation in interbank markets and heightened instability in other markets, including sharp falls in share prices."

He also referred to evidence of "a significant moderation in growth in Australia's trading partners in Asia."

Stevens said financing around the world would be difficult for "some time" and noted that Australia was affected less than other countries "given the relative strength of the local banking system."

The move follows a quarter-point reduction last month that was the first decrease in nearly seven years. Continued...