The Australian sharemarket rallied on Wednesday, nearing a 1% gain, as cooling core inflation bolstered expectations of a possible interest rate cut by the Reserve Bank of Australia (RBA) as early as February.
The S&P/ASX 200 rose 64 points or 0.8% to 8,349.1, reversing earlier declines.
Among data releases, the Australian Bureau of Statistics reported a drop in core inflation to 3.2% in November, down from 3.5% the previous month. However, headline inflation ticked higher to 2.3%.
Financial stocks drove the ASX higher, as Commonwealth Bank, National Australia Bank and Westpac gained 1.7%, 1.8%, and 1.4%, respectively.
Miners rebounded after a string of losses, despite iron ore prices remaining at four-month lows. Fortescue Metals climbed 1.9%, Rio Tinto advanced 1.1%, and BHP rose 1.8%.
Technology stocks, which opened higher, reversed gains to trade 0.8% lower. Appen lost 2.3%, NextDC fell 0.2%, and Xero dropped 1.8%.
On the bond markets, 10-year and 2-year yields fell 0.6% and 1.3% to 4.507% and 3.911%, respectively.