Australian shares rebounded on Wednesday, snapping a three-session losing streak, as gains in banks and consumer stocks followed softer economic data that reduced expectations of another rate hike.
The benchmark S&P/ASX 200 index rose 0.6% to 8,653.30 points after three straight sessions of losses.
While inflation remains the Reserve Bank of Australia's key focus ahead of next week's meeting, recent data point to a slowing economy, said Luke Winchester, portfolio manager at Merewether Capital.
"The market is beginning to price in rate cuts now coming sooner than expected and perhaps no more rises before the next cut," Winchester said.
Rate hike bets pared back after a softer inflation reading for April and slower-than-expected economic growth in the March quarter.
The market had long given up on a hike at the RBA's June 16 meeting, but pricing for August has come back to around 35% from more than 80% a month ago.
Financials gained 0.9%, their best day in nearly two weeks. Westpac Banking climbed 2%, while two of the other "Big Four" banks rose more than 0.7%.
Consumer staples sub-index jumped 3.9% with Coles and Woolworths advancing 5% and 3.2%, respectively.
Consumer discretionary stocks added 3.6%. Wesfarmers , Harvey Norman and JB Hi-Fi gained more than 3.5%.
Capping gains, miners dropped 1.4% in their fourth successive session of losses, as copper prices slid. Rio Tinto and Fortescue slid 1% and 0.5%.
Adding pressure on the miners, gold stocks dropped 4.5% to its lowest since late March, tracking softer bullion.
Insurance broker Steadfast was the top gainer on the benchmark as it surged more than 35% to its best day after receiving a buyout bid of A$7.7 billion ($5.40 billion), including debt.
Further south in New Zealand, the benchmark S&P/NZX 50 index fell 0.4% to 13,253.65 points. ($1 = 1.4247 Australian dollars)
