The S&P/ASX200 rose 59.9 points on Wednesday, up 0.69 per cent, to 8,717.7, as the broader All Ordinaries jumped by 62.5 points, or 0.7 per cent, to 8,945.1.
Interest rate-sensitive stocks led the gains after an unexpected dip in April headline inflation and a soft jobs report last week likely gave the RBA room hold the cash rate steady at 4.35 per cent at its June meeting.
"Technology was the stand-out sector today, leading the gains as investors rotated back into one of the market's most rate-sensitive corners," Vantage senior market analyst Hebe Chen told AAP.
However, with the impacts of the Middle East energy crisis still filtering through the economy and the US-Iran conflict soon entering a fourth month, upside risks to price growth remain.
"Beyond the domestic picture, US inflation data, global bond yield stress and geopolitical uncertainty around the Iran ceasefire could still remind investors that the risks have not fully cleared," Ms Chen said.
The heavyweight financials sector turned around an early slump to end the session 0.1 per cent higher, with broad-based strength counterbalancing weakness in three of the big four banks.
Bourse operator ASX Ltd was heavy, dropping by almost 10 per cent to a nine-year low, a day after flagging higher spending expected next financial year.
Basic materials stocks had a solid day, led by a 1.5 per cent boost to BHP shares to a fresh record close of $61.28, while South32, Lynas Rare Earths and James Hardie also posted strong gains.
Gold stocks were mixed, as the precious metal eased to $US4,484 ($A6,272) an ounce.
The energy sector advanced 0.4 per cent despite oil prices edging lower during the session, with Woodside, Santos, Ampol and Viva sluggish as coal producers and uranium stocks improved.
Consumer cyclicals rocketed 1.8 per cent higher in a broad-based rally fuelled by tempering rate hike expectations.
The sector is on track for a third week of gains after its value tumbled by more than a quarter since October.
Real estate stocks also benefited from the cooler inflation print, rallying 1.6 per cent with an outsized boost for segment giant Goodman Group, a day after its third quarter operational update failed to make a major impression.
In company news, Southern Cross Media shares soared more than seven per cent higher after Gina Rinehart emerged as a major shareholder, after financially backing Bruce McWilliam's nine per cent stake in the company.
Nufarm shares rocketed almost 14 per cent to a one-year high after growing its first-half net profit by more than a quarter to $38 million, while flagging a capital expenditure decrease of $46 million to $200 million for the current financial year.
The Australian dollar is buying 71.46 US cents, down slightly from 71.65 US cents on Tuesday at 5pm.
ON THE ASX:
* The S&P/ASX200 rose 59.9 points, or 0.69 per cent, to 8,717.7
* The broader All Ordinaries gained 62.6 points, or 0.7 per cent, to 8,945.2
One Australian dollar trades for:
* 71.46 US cents, from 71.65 US cents at 5pm AEST on Tuesday
* 113.89 Japanese yen, from 114.00 Japanese yen
* 61.37 euro cents, from 61.58 euro cents
* 53.13 British pence, from 53.16 British pence
* 121.65 NZ cents, from 122.45 NZ cents
15°C