Australian shares rose on Friday, on track for their best weekly gain in nine, as positive US economic data signalled easing inflation, raising investors’ hopes for a pivot on policy tightening by the Federal Reserve.

The S&P/ASX 200 index climbed 0.8% to 7337.70 points by 2330 GMT, and gained 3% so far this week.

The benchmark closed 1.2% higher on Thursday.

Data showed that US consumer prices fell for the first time in over 2-1/2 years last month, indicating that inflation was now on a sustained downward trend, boosting the case for the central bank to ease off from its hawkish monetary policy.

“We are becoming more encouraged that inflation can moderate gradually through 2023.

As supply chains normalise and consumer demand moderates, demand and supply chain-driven inflation is easing,“ said Brian Martin, Head of G3 Economics at ANZ.

Domestic energy stocks emerged as the top gainers on the benchmark, rising up to 2% after oil prices gained on lower US consumer prices and China’s demand outlook.

Sector majors Woodside Energy Group and Santos Ltd jumped 1.7% and 2.7%, respectively. Miners and mining sub-index climbed 0.8% as steel-making commodity prices continued to advance.

Banks, miners lift Australian shares as trade surplus widens; US CPI data in focus

Sector giants BHP Group, Rio Tinto and Fortescue Metals Group added between 0.3% and 0.6%. Financials added 0.9% with the so-called “Big Four” banks trading in positive territory.

Domestic technology stocks climbed 0.9%, in tandem with their oversees peers, with Xero Ltd jumping 2.1%, while shares of Computershare Ltd edged 0.5% higher.

Gold stocks added to the market cheer with a 1.3% jump, while Newcrest Mining rose 1.5% and Northern Star Resources gained 1.1%.

Across the Tasman Sea, New Zealand’s benchmark S&P/NZX 50 index rose 0.8% to 11,767.27.