The Australian sharemarket posted its strongest rally since 9 February on Wednesday, driven by rising optimism over potential de-escalation in the Middle East conflict and softer-than-expected domestic inflation data.
The S&P/ASX 200 Index climbed 154.9 points or 1.9% to 8,534.3, with nine of the 11 sectors trading in positive territory.
Market sentiment was buoyed by reports of diplomatic progress between the United States and Iran.
Commodity markets reflected the improving outlook. Brent crude dropped 4.7% in Asian trading, while gold prices rebounded as investors adjusted expectations around geopolitical risk and inflation.
On the domestic front, data from the Australian Bureau of Statistics (ABS) showed that consumer price inflation (CPI) rose 3.7% in the 12 months to February, slightly below expectations and easing from the prior reading.
The data provided additional support to equities by reinforcing expectations that price pressures may be moderating.
The Materials sector led gains on the ASX, rising 4.5%, supported by rising gold prices.
Northern Star Resources added 7%, Evolution Mining gained 8.5%, and Newmont Corporation recorded gains of 8.9%.
Major diversified miners also advanced, with BHP up 3.3% and Fortescue Metals Group closing 1.8% higher.
Rio Tinto rose 1.6% after securing a landmark agreement to support the long-term future of its Boyne aluminium smelter in North Queensland.
Under the deal, Rio Tinto will receive A$2 billion in government subsidies, contingent on committing $7.5 billion towards new clean energy projects in the state, aimed at ensuring the smelter’s long-term viability.
Energy stocks moved lower in line with falling oil prices. Woodside Energy fell 3.2%, Santos lost 2.3%, Beach Energy fell 5.3%, and Viva Energy declined 2.9%.
In company-specific news, Amplitude Energy plunged 36.7% after determining that its Isabella gas discovery in the offshore Otway Basin was not commercially viable following flow test results. The company said it would plug and abandon the well.
Meanwhile, 4DMedical surged 34.6% after announcing the deployment of its CT:VQ ventilation and perfusion imaging technology at the Mayo Clinic, expanding its presence across leading US academic medical centres.
Pepper Money rose 5.4% after confirming it had ended takeover discussions with Challenger, rejecting a $2.25 per share proposal on the basis that it was not reasonably capable of execution.
Shares in Challenger also gained 3.7%.
On the bond markets, yields moved lower, with the 10-year rate falling 2% to 4.958% and the 2-year yield declining 2.2% to 4.626%.
