The S&P/ASX200 surged 154.9 points on Wednesday, up 1.85 per cent, to 8,534.3, as the broader All Ordinaries gained 174 points, or 2.03 per cent, to 8,745.3.
It was the best day since April 10, 2025, when the market rebounded more than four per cent from US President Trump's disastrous Liberation Day tariff sell-off.
Wednesday's rebound clawed back more than $56 billion of an estimated $300 billion wiped out since the conflict began.
The ceasefire reports leaned heavily on claims made by US officials, and have not been confirmed by Tehran.
"The market seemed to seize on the optimistic view expressed by the US president, and ignore all other news flow, and that is sort of supporting the markets," Moomoo' market strategist Michael McCarthy told AAP.Â
"(But) while the Strait of Hormuz remains blockaded, Iran has a lot of say in the length of this war - It is not a decision that the US can unilaterally make, unless they get the firepower on the ground there to force open the strait."
Beaten down mining stocks were the biggest benefactors after three weeks of heavy losses, the basic materials sector up more than four per cent and clambering out of bear market territory.
Mining giant BHP jumped 3.3 per cent to $50.12, while Rio Tinto advanced 1.6 per cent after securing $2 billion in government subsidies to keep its Boyne aluminium smelter online.
Resurgent gold miners also lifted the segment, as the precious metal rose to $US4,559 ($A6,538) an ounce, boosting names like Newmont, Evolution and Northern Star up to 8.9 per cent.
Energy was the only sector deeply in the red, down 2.3 per cent as Brent crude oil prices eased from around $US114 a barrel to $US96 per barrel.
Oil and gas giants Woodside and Santos were sluggish as a result, along with coal miners, while uranium stocks rebounded from recent selling pressure.
Airlines Qantas and Virgin Australia benefiting from hopes of an end to flight disruptions in the Middle East, up four and 11.5 per cent respectively, with only Virgin offering direct flights to the region.
The heavyweight financials sector gained 1.3 per cent, tracking gains with three of the four big banks, as investors continued to exclude NAB, which is down almost a tenth since the same time last week.
In company news, 4D Medical value swelled by more than a third after it secured a deal with a US hospital group.
Alternative lender Pepper Money overcame an early wobble to end the session more than five per cent higher, after it knocked back a takeover offer from investment firm Challenger, which rose 3.7 per cent.
The Australian dollar is buying 69.71 US cents, up from 69.66 US cents on Tuesday at 5pm.
Australia's February inflation print came in slightly lower than expected at 3.8 per cent over 12 months, still beyond the Reserve Bank's target range and crucially, pre-dating the gulf conflict price shock.
ON THE ASX:
* The S&P/ASX200 gained 154.9 points, or 1.85 per cent, to 8,534.3
* The broader All Ordinaries rose 174 points, or 2.03 per cent, to 8,745.3
One Australian dollar trades for:
* 69.71 US cents, from 69.66 US cents at 5pm AEDT on Tuesday
* 110.84 Japanese yen, from 110.51 Japanese yen
* 60.14 euro cents, from 60.13 euro cents
* 52.12 British pence, from 51.98 British pence
* 119.96 NZ cents, from 119.49 NZ cents
22°C