Australian shares traded higher on Thursday, as financials and energy stocks led the gains, while investors digested the latest US inflation print and assessed its impact on the global interest rates outlook.

The S&P/ASX 200 index was up 0.6% at 8,035.1 points, as of 1236 GMT.

The benchmark closed 0.3% lower on Wednesday.

The latest US inflation report led market watchers to rule out expectations of a 50-basis-point (bp) rate reduction by the Federal Reserve next week, instead had their bets firmed on a 25-bp cut.

In Sydney, most sub-indexes traded in the positive territory.

Rate-sensitive financials were up 0.8%, with the “Big Four” banks advancing between 0.6% and 1.1%.

Tracking oil prices, energy stocks were trading nearly 1% higher with sector major Woodside Energy up 0.7% and Paladin Energy up 9.1%.

Brent crude futures rose 0.18% to $70.74 a barrel while US West Texas Intermediate (WTI) crude gained 0.1% to $67.38 per barrel.

Gold stocks traded 0.6% higher, with miners Northern Star Resources and Evolution Mining gaining 1.2% and 1%, respectively.

Bucking the trend, local miners inched lower by 0.2%.

Mining giant BHP Group shed 1.9%, while Rio Tinto and Fortescue gained 1.1% and 1%, respectively.

Overnight, the US Dow Jones Industrial Average rose 124.75 points, or 0.31%, to 40,861.71 points on Wednesday.

Australian shares flat as miners counter losses in banks

The S&P 500 gained 58.61 points, or 1.07%, while Nasdaq climbed 369.65 points, or 2.17%.

Among individual stocks, Nine Entertainment dropped as much as 4.4% to its lowest level since late April 2020 after the company said CEO Mike Sneesby would step down with effect from Sept. 30.

The broadcaster was among the top laggards in the benchmark index. New Zealand’s benchmark S&P/NZX 50 index was up 0.5% at 12,692.24 points.