Softer Inflation Data Sends Aussie Stocks Soaring

Australian stocks experienced their best day in about eight weeks due to a softer inflation reading, which eased expectations for another near-term Reserve Bank of Australia (RBA) rate hike.

The key data point was August's trimmed-mean inflation, a 'core' measure that strips out big price swings. It rose 0.2% for the month versus a 0.3% forecast, while the annual rate held at 3.6%, prompting traders to mark down the market's implied odds of a November hike to 20% from 36%. With fewer hikes priced in, investors treated interest rates as less likely to stay high for long.

The S&P/ASX 200 finished up 0.9% at 8,789.30, with rate-sensitive areas leading the move. The ASX property sector jumped 3.7%, a reminder that markets trade the path of policy, not just the latest headline.