The ASX 200 climbed 0.92% on Wednesday, closing at 8,789.3, as softer-than-expected inflation data eased fears of further interest rate hikes. Headline CPI rose 4.0% year-on-year in August, up from 3.5% in July, while trimmed mean inflation held steady at 3.6%. The benchmark surged more than 1% by mid-afternoon, with rate-sensitive property and consumer stocks driving much of the gains as bets on a November rate hike were scaled back.
Markets had braced for worse, and the result sparked a broad rally led by property and consumer stocks. Bond yields fell, the Australian dollar weakened, and expectations for a November rate hike by the Reserve Bank of Australia (RBA) were pared back. Australia’s three-year bond yield also dropped sharply following the CPI data, reflecting reduced odds of another RBA hike.
Inflation Data Sparks Market Relief
The RBA’s hiking cycle may be nearing its end, according to Capital Economics, though RBC cautioned that underlying inflation remains a concern. The ASX 200 saw 10 sectors gain, with real estate leading the charge, up 3.68%. Discretionary stocks rose 2.27%, telcos added 1.94%, and industrials gained 1.65%. The energy sector also performed well, up 1.56%, while healthcare, materials, staples, utilities, and financials all finished in positive territory. The only sector in the red was tech, down 0.41%.
The broader market also joined the rally, with the All Ordinaries up 0.93%, the Small Ordinaries gaining 0.70%, and the ASX 200 Resources Index adding 0.79%. Gold stocks outperformed, with the All Ordinaries Gold Index rising 1.35%.
Global Markets and Commodities
In global markets, Middle East crude exports have rebounded to 98% of pre-war levels, though refined product flows remain significantly below par. The Trump administration is releasing an additional 40 million barrels from the U.S. emergency oil reserves to ease supply pressures. JPMorgan noted the recovery in crude exports, while refined product flows continue to lag.
The U.S. 30-year Treasury yield hit its highest level since 2002 before Federal Reserve comments tempered rate-hike expectations. U.S. consumer confidence fell to its lowest point since 2014, reflecting growing concerns about the job market. Metrics faced further challenges, with KPMG unable to sign off on the FY26 accounts of its three suspended listed funds by the deadline.
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Corporate Highlights and Tech Developments
In corporate news, Lendlease Group (ASX:LLC) surged 12% after completing the $525 million sale of its remaining Keyton stake. Northern Star Resources (ASX:NST) rose over 6% on reports of a potential sweetened takeover offer from Gold Fields.
Codan (ASX:CDA) continued its remarkable run, gaining more than 6% after Tuesday’s 24% surge, bringing its year-to-date gain to roughly 140%. DroneShield (ASX:DRO) also saw strong gains after securing a spot on a U.S. counter-drone contract worth up to $500 million, though no orders are guaranteed.
On the downside, Black Cat Syndicate (ASX:BC8) dropped about 18% after its FY27 guidance indicated higher first-half costs during the Kal East ramp-up. Imagion Biosystems (ASX:IBX) cleared a key hurdle for its Phase 2 trial, while Koonenberry Gold (ASX:KNB) announced promising findings at its Dunedoo site, pointing to a porphyry-epithermal system.
Tech Sector Left Behind
While most sectors celebrated, tech was the lone loser, ending the day in the red. Meanwhile, OpenAI is reportedly seeking another $30 billion in funding at a staggering $1.4 trillion valuation, even as it shelves IPO plans. The company also launched its new “Dots” AI agents, adding a quirky twist to the AI wars with domain-name antics, including redirecting Dot.com to Elon Musk’s Grok.
The tech sector remained the only one in negative territory. Wednesday also marked Thunderbirds Day, commemorating the 1965 debut of the classic TV show. The first episode, “Trapped in the Sky”, aired on September 30, 1965, and the show remains a nostalgic favorite, with its 1980s repeats and Commodore 64 games fondly remembered.
