The Australian share market has bounced back emphatically from a four-day slide, recording its best day since January ahead of the release of pivotal US inflation data.
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The benchmark S&P/ASX200 index on Tuesday finished up 104.9 points, or 1.5 per cent, at 7,108.9, while the broader All Ordinaries rose 108.9 points, or 1.51 per cent, to 7,315.8.
Local stocks followed a solid lead from Wall Street overnight, with the Dow Jones up 0.6 per cent and the S&P500 and Nasdaq both rising 0.2 per cent after bond yields retreated from their bullish run.
Australian government 10-year bonds followed their US counterparts, falling from a decade-high of 4.315 per cent, in welcome news for the big banks, IG markets analyst Tony Sycamore said.
He said traders were buoyed by news China would increase support for its stalling economy after Tuesday's weak inflation data sparked fears of deflation.
The measures targeting China's ailing property market, which accounts for about 35 per cent of the nation's steel consumption, could be a boon for domestic iron ore miners.
The ASX's largest company, BHP, climbed 1.4 per cent, while Rio Tinto rose 1.3 per cent and Fortescue Metals lifted two per cent.
Gold miners led the way higher, buoyed as the falling US dollar boosted gold prices.
Bellevue Gold was up 15.2 per cent, while De Grey, Evolution and Northern Star jumped 5.8 per cent, 4.6 per cent and 3.1 per cent respectively.
Growth sectors outperformed the index with IT stocks the market's biggest movers, up 2.6 per cent.Â
Megaport rocketed 33.8 per cent higher after the internet connectivity company upgraded its earnings guidance range for the last financial year.
RPM Global surged 9.8 per cent after the mining software provider upgraded its own earnings expectations, while accounting software company Xero jumped 2.3 per cent.
Consumer discretionaries climbed 1.9 per cent, despite a Westpac report showing consumer confidence remains low amid lingering interest rate worries.
Furniture store Nick Scali moved 4.3 per cent higher and online retailer Kogan finished up four per cent.
Financials made solid gains, with CBA up 1.1 per cent, Westpac 1.6 per cent, NAB 2.1 per cent and ANZ 1.3 per cent higher.
Afterpay owner Block jumped 3.9 per cent to close at a three-month high of $102.77.
Bell Financial announced it expects a 21 per cent increase in profit for the first half of 2023, sending shares in the stockbroker up 11.5 per cent to $1.02.
Property services company Johns Lyng Group was a rare loser, down 1.9 per cent, days after adding Smoke Alarms Australia and Linkfire to its operations portfolio.
Investors will be eagerly anticipating US inflation data on Wednesday night Australian time.
Corpay APAC currency analyst Peter Dragicevich anticipates the US figures will undershoot expectations, leading to an increased chance the Federal Reserve will stop raising rates sooner.
He expects Reserve Bank governor Philip Lowe to signal further rate hikes on Wednesday, given underlying inflation remains stubbornly high and labour markets tight.
NAB's monthly survey showed ongoing resilience in business conditions, steady at +9 index points in June.
"We continue to see warning signs in the survey about the outlook for growth, but as of June firms were yet to see a real deterioration," NAB chief economist Alan Oster said.
The combination of a hawkish RBA and expectations of a more dovish Fed should, in the short term at least, boost the Australian dollar against its US counterpart.
The Australian dollar was higher against the greenback, buying 66.80 US cents, from 66.57 at Monday's ASX close.
ON THE ASX:
* The benchmark S&P/ASX200 index finished Tuesday up 104.9 points, or 1.5 per cent, at 7,108.9.
* The broader All Ordinaries rose 108.9 points, or 1.51 per cent, to 7,315.8.
CURRENCY SNAPSHOT:
One Australian dollar buys:
* 66.80 US cents, from 66.57 US cents at Monday's ASX close
* 94.11 Japanese yen, from 95.01 Japanese yen
* 60.65 Euro cents, from 60.79 Euro cents
* 51.91 British pence, from 51.99 pence
* 107.67 NZ cents, from 107.75 NZ cents.