Australian shares came up just short of a record close on Wednesday after a quarterly inflation report all but sealed expectations for an interest rate cut from the Reserve Bank next month, fuelling a rally in property stocks.

The S&P/ASX 200 Index rose by 51.80 points, or by 0.6 per cent, to 8756.40 – just shy of its all-time high of 8757.20 on July 18. Gains were led by a rally in the rate-sensitive real estate sector, while the broader All Ordinaries Index rallied by a similar amount.

That’s after the Consumer Price Index slowed more than expected to an annual rate of 2.1 per cent from 2.4 per cent for the June quarter. Core inflation – the RBA’s preferred measure – came in at 2.7 per cent over 12 months from 2.9 per cent.

The inflation numbers saw the Australian dollar dip to US65¢, while the widely tracked three-year bond rate fell 7 basis points to 3.35 per cent. Money markets have priced in a 100 per cent likelihood of a 25-basis-point cut from the RBA next month.

“Since the RBA’s last board meeting, it seems the arguments for lowering the cash rate have now materialised more than the arguments put forward to maintain the more restrictive monetary policy settings,” said KPMG chief economist Brendan Rynne.

That data prompted investors to pile into real estate stocks, with Mirvac up 2.7 per cent to $2.26, Vicinity Centres by 1.7 per cent to $2.47, and Scentre Group rallied 1.9 per cent.

And after a mixed start to the session, the major banks rallied in the afternoon with Commonwealth Bank advancing 1.6 per cent after two days of losses to $176.99, Westpac firmed 1.6 per cent to $33.72, ANZ rose 1.3 per cent and National Australia Bank 0.7 per cent.

Materials were soft in a mixed session for the majors. Iron ore futures were little changed as China’s steel industry is urged to adjust output to balance demand and supply. Fortescue Metals advanced 0.6 per cent to $18.19, while BHP and Rio Tinto slipped 0.5 per cent and 1 per cent, respectively. Rio Tinto reported after the close of trading that half-year earnings had slumped to a five-year low on the back of weaker iron ore prices.

Stocks in focus

In company news, IGO dived 7.2 per cent to $4.64 after the miner said operational issues had continued to impact its Kwinana lithium hydroxide refinery production. Full-year production finished below guidance and an impairment of between $70 million and $90 million was expected.

Appen plunged 12.8 per cent to 95.5¢ after it warned that full-year revenue was tracking towards the low end of its guidance, as ongoing uncertainty in the US artificial intelligence market continues to weigh on performance.

Pilbara Minerals lifted 3 per cent after the company guided to higher production and lower costs in FY26 as it tries to unlock value from recent plant expansions and maintain tight capital discipline.

PointsBet rallied 4.2 per cent to $1.25 after Betr upped its hostile takeover bid to 4.219 Betr shares for every PointsBet share – an offer it says is superior to Japanese giant Mixi’s offer of $1.20 per share.

And PolyNovo was among the biggest risers, rallying 7.8 per cent to $1.32 after the business reported earnings between $11.2 million and $12.4 million in FY25, compared with last year’s $3.6 million.

That’s a wrap on today’s news. Join us again soon for more live markets news.