Australian shares rebounded on Wednesday as softer-than-expected inflation data strengthened expectations that the Reserve Bank of Australia will leave interest rates unchanged at its June meeting.
The S&P/ASX 200 Index rose 59.9 points, or 0.7%, to close at 8,717.7, with 10 of the benchmark’s 11 sectors finishing higher.
Investor sentiment improved after headline annual inflation eased to 4.2% in April, below market expectations of 4.4%, largely due to a temporary reduction in the fuel excise.
The weaker inflation outcome supported rate-sensitive sectors, particularly technology stocks, as investors reduced expectations of further near-term tightening from the RBA.
Among the technology names, WiseTech Global gained 1.4%, TechnologyOne added 0.6%, and NextDC climbed 3.8%.
Consumer discretionary stocks also advanced strongly, with Tabcorp rising 5.0%, Aristocrat Leisure gaining 3.2%, Harvey Norman adding 2.5%, and Domino’s Pizza Enterprises closing 1.4% higher.
Real estate investment trusts were mostly stronger as lower bond yields improved sentiment toward the sector. Goodman Group climbed 3.7%, Mirvac gained 0.6%, and Scentre Group added 1.1%, while Charter Hall fell 2.5%.
The Materials sector also contributed to gains, with heavyweight miners trading mostly higher. BHP rose 1.5%, Fortescue gained 0.4%, while Rio Tinto edged 0.1% lower.
Agricultural chemicals company Nufarm surged 13.7% after reporting a 28% increase in half-year net profit and reaffirming its FY26 guidance.
The Financial sector was mixed following the softer headline inflation result, with investors remaining cautious about persistent underlying price pressures facing businesses.
Commonwealth Bank gained 0.3%, while ANZ slipped 0.3% and NAB fell 0.6%.
Westpac lost 0.6% after being ordered to pay $26 million in civil penalties following legal action brought by the Australian Securities and Investments Commission (ASIC) over failures to respond appropriately to customers experiencing financial hardship.
ASX Ltd fell a further 9.7%, extending losses after Tuesday’s record 13.3% decline, once again making it the worst-performing stock on the benchmark index.
In corporate news, Endeavour Group dropped 4.9% after unveiling a $300 million cost-saving initiative and lowering its dividend payout target, despite announcing a major consolidation of its non-core winery operations.
KMD Brands jumped 17.3% after announcing a broad strategic review aimed at identifying opportunities to accelerate shareholder value, alongside the continued closure of underperforming stores.
On the bond markets, Australian government bond yields moved lower, with 10-year yields falling 1.4% to 4.859% and two-year yields dropping 1.8% to 4.54%.
