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The Australian sharemarket rose after August inflation data came in below market expectations, easing concerns about aggressive interest rate hikes by the Reserve Bank of Australia. The S&P/ASX 200 Index gained 0.7 per cent following the release of consumer price index figures that were lower than the consensus forecast, despite a recent rate hike to a 15-year high.
The sharemarket has extended its gains after inflation came in softer than expected, reducing the chances of an aggressive tightening cycle by the Reserve Bank of Australia.
The S&P/ASX 200 Index rose 56.4 points, or 0.7 per cent, to 8765.7 as of midday on Wednesday, with 10 out of the 11 sectors in the green, led by real estate. It comes after the release of August inflation data at 11.30am which saw the consumer price index for August pick up to 4 per cent year on year, up from 3.5 per cent in July, according to the Australian Bureau of Statistics.
On a monthly basis, headline CPI came in at 0.4 per cent down from 1 per cent in the previous period. Market consensus was for monthly headline CPI to accelerate higher to 4.1 per cent for the 12 months to the end of August. For the month, economists forecast inflation to rise 0.5 per cent.
On Tuesday, the RBA lifted the cash rate to a 15-year high of 4.6 per cent, saying some inflation risks have materialised and left the door open to further tightening. The job market, a key inflation driver, is slowly easing but is still seen tight by the RBA.
Australian Sharemarket Inflation Data Reserve Bank Of Australia S&P/ASX 200 Interest Rates
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