Australian equities extended early gains on Wednesday, with the benchmark S&P/ASX 200 index rising as much as 0.4% to 8,823.2.
The rally was broad-based but anchored by strength in the financial and technology sectors, which benefited from the improved inflation data print.
The market move followed the release of May consumer price data, which showed headline inflation cooling.
This headline figure provided immediate relief to investors who had been weighing the risk of further monetary tightening.
The positive reaction in equities suggests that traders are prioritizing the headline trend over more granular underlying pressures.
The cooling headline rate stands in contrast to recent underlying inflation metrics.