The local share market has finished higher after a slightly better-than-expected domestic inflation report seemed to support the potential for mid-year interest rate cuts.
The benchmark S&P/ASX200 index on Wednesday closed up 39.4 points, or 0.51 per cent, to 7,819.6.
That's just 27.4 points away from its highest-ever close of 7,847 from March 8 and is also its best close since then.
The broader All Ordinaries on Wednesday rose 36.9 points, or 0.46 per cent, to 8,073.6.
The market had already been trending higher climbed further after the Australian Bureau of Statistics announced that consumer prices rose 3.4 per cent in the year to February, a figure that was unchanged for a third consecutive month and a touch under consensus expectations of 3.5 per cent inflation.
"Overall, the inflation report was a touch better than feared - and has likely neutral implications for interest rate outlook," said Betashares chief economist David Bassanese, who is expecting the RBA to first cut rates in September and a second time by Christmas.
AMP deputy chief economist Diana Mousina expects rate cuts even sooner, saying the CPI data for the first two months of the year suggests the quarterly readout the RBA receives in late April will also come in under expectations, providing scope for the central bank to begin cutting interest rates.
AMP is of the view that rate cuts could begin as soon as June, although there is a risk they could be pushed back to even August or later if unemployment remains low, Ms Mousina said.
But HSBC's chief economist for Australia, Paul Bloxham, had a different take on the Wednesday's data, saying it showed the pace of the decline of inflation might be slowing and the "last mile" of returning inflation to the RBA's target rate of two to three per cent could take time.
"We see RBA rate cuts as unlikely in 2024," he wrote.
Markets are also awaiting a report on the Federal Reserve's preferred measure of inflation, the personal consumption expenditure index, which will be released close to midnight AEDT on Thursday.
Nine of the ASX's 11 sectors finished higher, with tech dropping 0.5 per cent and utilities down 0.2 per cent.
The Big Four banks were mostly higher, with CBA rising 1.2 per cent to $120 and ANZ and NAB both climbing 0.7 per cent, to $29.26 and $36.69, respectively.
Westpac dropped 0.9 per cent to $26 after Australia's oldest bank said it would spend billions to unite its St George, Bank of Melbourne and BankSA brands onto a single banking infrastructure platform.
Elsewhere in the sector, Platinum Asset Management plummeted 21.1 per cent to a four-week low of $1.03 after announcing on Tuesday evening that a large institutional client would redeem at least $1.4 million in funds from Platinum.
The heavyweight mining sector had a fairly quiet day, with BHP rising 0.1 per cent to $43.68, Fortescue flat at $25.19 and Rio Tinto dipping 0.4 per cent to $120.93.
APM Human Services was in a trading halt after announcing that CVC Asia Pacific had told it that the private equity group wouldn't pursue a buyout of the job-training provider, with match data suggesting APM shares were set to fall by 10 per cent when they resumed trading.
The Australian dollar was buying 65.27 US cents, from 65.37 US cents at Tuesday's ASX close.
ON THE ASX:
* The benchmark S&P/ASX200 index on Wednesday finished 39.4 points higher at 7,819.6, a gain of 0.51 per cent.
* The broader All Ordinaries rose 36.9 points, or 0.46 per cent, to 8,073.6.
CURRENCY SNAPSHOT:
One Australian dollar buys:
* 65.27 US cents, from 65.37 US cents at Tuesday's ASX close
* 98.98 Japanese yen, from 98.95 yen
* 60.28 Euro cents, unchanged
* 51.74 British pence, from 51.72 pence
* 108.81 NZ cents, from 108.81 NZ cents
