Australia's Share Market Surges on Softening Inflation

Australia's share market surged to its highest value since March after headline inflation eased in June, reducing the likelihood of an interest rate hike. The benchmark S&P/ASX 200 index jumped by 112.2 points on Wednesday, increasing by 1.25 per cent to 9060. This growth was accompanied by a rise in the broader All Ordinaries index, which gained 108.8 points, or 1.19 per cent, to 9220.8.

The Reserve Bank's preferred trimmed mean price growth measure, or core inflation, remained steady at 3.6 per cent, slightly below consensus estimates but above its target range of 2-to-3-per cent. Global X ETFs senior investment strategist Marc Jocum said that the inflation figures 'suggested the inflation fire was finally beginning to lose some oxygen, giving the Reserve Bank its first genuine sigh of relief in months.'

All 11 stock market sectors improved as the bourse had its best day in four weeks. Key performers included Rio Tinto, whose shares jumped almost 5 per cent after it reported a 47-per cent increase in its first-half net profit to $US6.7 billion. The materials sector also advanced, with BHP and Fortescue improving despite copper and iron ore futures holding steady.

The energy sector gained as oil prices rebounded on reports of Iranian missile intercepts. Woodside's shares increased by one per cent after its second-quarter operating revenue rose 28 per cent to $US4.2 billion, although it trimmed the upper end of its full-year production guidance range to 185 million barrels from 186 million barrels.

The Australian dollar depreciated to 69.46 US cents, down from 69.71 US cents on Tuesday at 5pm AEST, as the local interest rate outlook softened.