Investing.com– Australia’s benchmark ASX 200 index hit a record high on Friday, as sentiment was aided by a series of soft inflation readings this week, while strength in commodity prices also boosted local miners.
The jumped 1.3% to a record high of 7,685.80 points by 22:38 ET (03:38 GMT), its second record high this week. The index had hit a record high on Wednesday following a positive reading on inflation.
Gains were driven by heavyweight bank and mining stocks, with Commonwealth Bank Of Australia (ASX:) rising 1.2%, while BHP Group Ltd (ASX:) added 0.9%.
Strength in technology stocks also aided the ASX, as they tracked strength in their U.S. peers. Gold stocks also rose tracking resilience in bullion prices.
Recent gains in Australian stocks were also driven by some optimism over more stimulus measures in China, after Beijing rolled out more monetary support for the economy. China is Australia’s biggest trading partner.
Australian (PPI) inflation data for the fourth quarter, released on Friday, read lower than expected, ramping up expectations that inflation was now retreating steadily in the country. The reading came just two days after a softer-than-expected (CPI) reading for the quarter.
The readings fed into hopes that inflation will fall at an accelerated pace in the coming months, giving the Reserve Bank of Australia some impetus to begin trimming interest rates.
The RBA is , and is widely expected to keep interest rates on hold, given that inflation was seen declining further since the bank’s final meeting for 2023.
But with inflation still running well above the RBA’s 2% to 3% annual target range, it appears unlikely that the bank will signal any interest rate cuts in the near-term.
Still, with the Australian economy also appearing to be cooling, investors were hopeful that rate cuts will come sooner, rather than later in 2024.