Australian equities surged on Wednesday, with the benchmark S&P/ASX 200 index climbing 1.3% to close at 9,060 points.
The rally was driven by fresh consumer price data showing that inflation eased more than anticipated during the June quarter, reinforcing market bets on monetary policy accommodation.
The positive sentiment was broad-based across the market, with financial and technology sectors leading the advance.
Investors interpreted the undershoot in inflation forecasts as a signal that the Reserve Bank of Australia (RBA) has greater flexibility to cut interest rates, potentially accelerating the easing cycle.
The move aligns with a wider trend of risk-on sentiment in Asian markets, which have been buoyed by cooling inflation data in the United States and shifting expectations for Federal Reserve policy.
The RBA’s next policy decision is scheduled for August 12, a key date for traders assessing the trajectory of Australian borrowing costs.