Australian shares advanced more than 1% on Wednesday, helped by a rebound in banking and mining stocks, after data showed core inflation surprised on the downside and greatly lessened the risk of another interest rate hike.

The S&P/ASX 200 index was trading 1.3% higher at 8,054.3 as of 0149 GMT, roughly 30 points below its all-time high.

Data showed consumer price inflation accelerated in the June quarter, although core inflation surprised on the downside and lowered the risk of another rise in interest rates.

Mining stocks, which have fallen 17% so far in 2024 owing to weak base metal prices and concerns about demand from top consumer China, jumped 1.5%, somewhat recovering from the prior session’s losses. Chinese iron ore futures rose 0.8%.

Rio Tinto rose 2.6% after the miner reported first-half earnings in line with market estimates as lower prices for its key commodity iron ore were offset by gains in its copper and aluminium businesses.

Financials climbed 1.2%, with Commonwealth Bank of Australia up 0.7%.

The Dow Jones Industrial Average rose 0.5% overnight, the S&P 500 lost 0.5% and the Nasdaq Composite lost 1.28%.

S&P 500 E-minis futures were up 0.07%.

The yield on benchmark 10-year Treasury notes rose to 4.153% compared with its US close of 4.141%. The Aussie dollar was 0.03% stronger against the US dollar at A$0.65 on Wednesday. Australian energy stocks rose 1.4%.

Australian shares climb nearly 1% as miners, banks shine

Oil retailer Origin Energy dropped as much as 4.1% after reporting a fall in fourth-quarter sales revenue.

Brent crude futures climbed 39 cents, or 0.5%, to $79.02 a barrel by 0020 GMT, while US West Texas Intermediate crude futures rose 52 cents, or 0.7%, to $75.25 a barrel.

In New Zealand, the benchmark S&P/NZX 50 index was trading slightly higher at 12,414.18.