The Australian share market has enjoyed its best day in six months, buoyed by signs the US may be heading for a "Goldilocks scenario" of controlling inflation while avoiding a recession.
The benchmark S&P/ASX200 index on Thursday finished up 111.2 points, or 1.56 per cent, to 7,246.9, the biggest rise since January 4.
The broader All Ordinaries was up 113.9 points, or 1.55 per cent, at 7,455.4.
The local bourse cracked a century in gains for the second time in three days, with all 11 industrial sectors finishing solidly higher.
GSFM investment strategist Stephen Miller said investors are gaining confidence the US central bank could successfully "thread the needle" and achieve "immaculate disinflation" - getting inflation under control without too much negative impact on activity and employment.
Wall Street jumped overnight after consumer price index figures for June undershot expectations at 0.2 per cent, bringing headline inflation down to three per cent from 5.9 per cent two months before.
The S&P500 rose 0.7 per cent and the tech-heavy Nasdaq jumped 1.2 per cent on hopes the price data might prompt the Fed to stop hiking interest rates sooner than previously thought.
Australia's own central bank is somewhat of a laggard in its cash rate cycle compared to its international peers, but slowing global inflation bodes well domestically, Eightcap market analyst Zoran Kresovic says.
He expects one more 25 basis point rate rise out of the Reserve Bank, but many analysts still think governor Philip Lowe and his board have another in the tank.
"A lot of segments in terms of inflation are actually starting to soften, probably the only strong one right now is the labour market," he told AAP.
Surging cyclicals, stocks like consumer discretionaries that do especially well when the economy is in fine health, are driving the bullish sentiment in the market, Mr Kresovic said.
The real estate sector was the biggest winner of the day - up 3.2 per cent - while consumer discretionary companies lifted 2.2 per cent.
Industrial property developer Goodman Group climbed 4.1 per cent while Westfield operator Scentre Group rallied 3.4 per cent.
Miners did much of the heavy lifting, rising 2.1 per cent.
BHP was up 1.5 per cent and Rio Tinto was 3.0 per cent higher.
Fortescue Metals climbed 1.3 per cent after its chair Andrew Forrest announced his separation from wife Nicola.
"After 31 years of marriage, we have made the decision to live apart," the pair said in a statement.
"There is no impact on the operations, control or direction of Fortescue, Minderoo or Tatterang."
Goldminers led the gains, as the weak US CPI readout sent bond yields tumbling.
Evolution Mining soared 7.3 per cent, while Newcrest was up 3.7 per cent, Northern Star 4.3 per cent and Perseus 8.1 per cent.
Information technology stocks followed the Nasdaq's lead, lifting 2.3 per cent on average.
Online hotel platform Siteminder booked a 4.9 per cent gain and accounting software provider Xero lifted 2.7 per cent.
The big banks stand to benefit from a lower terminal US cash rate, as they rely on much of their financing from overseas.
CBA climbed 1.5 per cent, ANZ gained 1.4 per cent, Westpac rose 1.2 per cent and NAB was 0.5 per cent higher.
Netwealth leaped 5.2 per cent after the financial platform announced a 26 per cent jump in funds under administration to $70 billion.
Alliance Aviation soared 13.1 per cent after the plane chartering business said underlying profit for the last financial year will exceed guidance, due to a lift in flying activity in the first half of 2023.
The only dark spot was the insurers.
QBE was the biggest loser on the ASX200 - down 2.9 per cent - and health insurer Medibank fell 1.5 per cent.
Tigers Realm, which runs a coal mining operation in Siberia, plunged 29 per cent as it prepares to take the Commonwealth to court after the foreign affairs department made an indicative assessment that its operations were breaking Russian sanctions.
The Australian dollar gained against the freefalling greenback, buying 68.11 US cents, from 67.08 at Wednesday’s ASX close.
ON THE ASX:
* The benchmark S&P/ASX200 index finished Thursday up 111.2 points, or 1.56 per cent, to 7,246.9.
* The broader All Ordinaries rose 113.9 points, or 1.55 per cent, to 7,455.4.
CURRENCY SNAPSHOT:
One Australian dollar buys:
* 68.11 US cents, from 67.80 US cents at Wednesday’s ASX close
* 94.49 Japanese yen, from 93.55 Japanese yen
* 61.15 Euro cents, from 60.83 Euro cents
* 52.36 British pence, from 51.77 pence
* 107.58 NZ cents, from 107.95 NZ cents.
