Australian shares rally after news of easing inflation

The Australian share market has rallied to a four-week high after statistics revealed the Reserve Bank's preferred inflation measure slowed in November, keeping hopes alive of an interest rate cut in February.

The benchmark S&P/ASX200 index gained ground on Wednesday for a fifth-straight session, finishing 64 points higher at 8,349.1, a 0.77 per cent rise.

The broader All Ordinaries gained 56.5 points, or 0.66 per cent, to 8,599.4.

The ASX200 had been down by as many as 22.8 points in morning trade but jumped into the green after the Australian Bureau of Statistics released consumer price index figures for November.

Annual trimmed mean inflation came in at 3.2 per cent, down from 3.5 per cent for the year to October.

The November figure was also slightly under the Reserve Bank's projection in December, and potentially low enough to convince the bank to cut rates at its February 18 meeting.

Krishna Bhimavarapu, Asia-Pacific economist at State Street Global Advisors, said annual trimmed mean inflation had continued moving towards the RBA's target band, with inflation in new dwellings the weakest since mid-2021.

"Yes, we can now confidently say that disinflation is running apace in Australia," Mr Bhimavarapu said.

However, the ABS also reported that job vacancies rose in November for the first time since May 2022, indicating the labour market remained resilient.

RBC Capital Markets chief economist Su-Lin Ong said this strength could lead the RBA to move more cautiously.

The investment bank predicts the central bank will cut rates just twice this in 2025, in May and August.

CBA economist Stephen Wu said much would depend on a December employment report due on January 16 and fourth-quarter inflation data released on January 29.

The ASX's winning streak stands at five days, its longest stretch since a seven-day streak in mid-September. It hasn't lost ground at all in 2025.

Six of ASX's 11 sectors finished higher on Wednesday and five closed lower.

Mining was the biggest mover, rising 1.6 per cent.

BHP climbed 1.8 per cent to $39.40, Fortescue added 1.9 per cent to $17.57 and Rio Tinto advanced 1.1 per cent to $115.93.

Goldminers also saw green as the precious metal changed hands at a five-day high of $US2,649 an ounce.

Evolution gained 1.8 per cent, Northern Star added 1.7 per cent and Westgold advanced 4.6 per cent.

Regis gained 5.4 per cent after the goldminer announced it ended 2024 with a record cash and bullion balance, while West African Resources climbed 4.0 per cent after the Burkina Faso-focused compan announced it had achieved the upper end of 2024 production guidance.

The big four banks finished higher, with NAB rising 1.8 per cent to $38.51, Westpac adding 1.4 per cent to $33.33, and ANZ and CBA both climbing 1.7 per cent, to $29.52 and $159.75, respectively.

In health care, Avita Medical plunged 19.3 per cent to a nearly two-month low of $3.51 after the spray-on skin company downgraded its revenue guidance, saying it expected to declare $18.4 million in the December quarter, down from estimates of $22.3 million to $24.3 million.

Uranium companies cooled off after two days of strong gains following the shutdown of a major mine in Kazakhstan.

Deep Yellow fell 6.3 per cent, Paladin retreated 3.8 per cent and Boss Energy fell 2.5 per cent.

The Australian dollar slid to a two-day low following the inflation readout, buying 62.32 US cents, from 62.68 US cents at close of business Monday.

ON THE ASX:

* The benchmark S&P/ASX200 index on Wednesday gained 64 points, or 0.77 per cent, to 8,349.1

* The broader All Ordinaries rose 56.5 points, or 0.66 per cent, at 8,599.4

CURRENCY SNAPSHOT:

One Australian dollar buys:

* 62.31 US cents, from 62.68 US cents at Tuesday's ASX close

* 98.54 Japanese yen, from 98.93 Japanese yen

* 60.18 euro cents, from 60.27 euro cents

* 49.90 British pence, from 49.98 pence

* 110.54 NZ cents, from 110.59 NZ cents