Australian shares rose on Wednesday as investors digested a mixed inflation print; headline inflation fell more than expected. The May inflation figures keep the Reserve Bank of Australia on standby to deliver further rate rises after its preferred gauge rose above forecasts.

The S&P/ASX 200 Index rose 26.80 points, or 0.3 per cent, to 8815.60 at 12.32pm (AEST) after trading up by about 0.1 per cent before the CPI data was released. Nine of the 11 sectors were stronger.

Figures showed headline inflation cooled to 4 per cent in the 12 months to May – less than the 4.3 per cent markets had expected on falling oil prices. Meanwhile, trimmed mean inflation – the RBA’s preferred measure – climbed to 3.6 per cent compared to 3.5 per cent forecasted.

“Market reaction was limited, with the Australian dollar and front-end Australian rates little changed, as investors look ahead to tomorrow’s employment report for a clearer signal on the labour market and policy outlook,” BNY APAC macro strategist Wee Khoon Chong said.

Investors were also awaiting a speech by RBA deputy governor Andrew Hauser after the market close for clues on how the central bank will interpret the mixed inflation print.

The Australian dollar held flat at US69.15¢ after plunging by nearly US1¢ overnight as the US dollar rose the most since November on rising expectations of interest rate increases in the world’s largest economy.

Technology was the strongest sector on the ASX, rebounding from heavy selling in the previous session. Xero soared 7.9 per cent as Citi also said the company’s latest UK price increases pointed to confidence in its market position.

WiseTech Global rocketed 14.2 per cent as traders bought the dip after the stock fell more than 20 per cent in the past two sessions on reports about its founder, Richard White.

The defensive healthcare sector saw strong activity with CSL up 3.3 per cent to extend gains in the past month to almost 20 per cent, while ResMed rose 3 per cent and Ramsay Healthcare by 2.5 per cent.

All the major banks were higher except for ANZ, which was flat at $35.74. Commonwealth Bank, Westpac and National Australia Bank were all up 1 per cent.

Materials were the weakest sector as gold fell 1 per cent to $US4070 an ounce on rising US bets. Ora Banda Mining eased 4.9 per cent, Resolute Mining 4 per cent and Newmont 2.2 per cent. Heavyweight BHP slid 0.9 per cent.

Brent crude fell 0.6 per cent to $US76.64 a barrel as more tankers openly transit the Strait of Hormuz, with the US and Iran making diplomatic progress towards ending the war. Woodside Energy slid 1.9 per cent and Karoon Energy 3.4 per cent.

Stocks in focus

Baby Bunting dived 12 per cent after it lowered its 2026 profit guidance, now expecting pro forma net profit of $16 million to $17 million compared to its previous guidance of $17.5 million to $19.5 million, following a softer-than-expected fourth quarter.

Tasmea rose 4.9 per cent on plans to acquire energy services provider JPS Group in a deal worth up to $75 million, boosting earnings per share by about 5 per cent. The company also reaffirmed its earnings guidance for the 2026 fiscal year.

Atlas Arteria fell 0.1 per cent as IFM Investors extended its hostile takeover by 14 days after it increased its stake in the toll road operator above 50 per cent. An independent expert said the $5.10 per share offer undervalued Atlas.

KMD Brands, the owner of the Rip Curl and Kathmandu retail chains, dropped 3.1 per cent after flagging a share consolidation. The move will see 1 new share issued for every 25 currently held, reducing the total number of shares in KMD from about 1.8 billion to about 72 million.