# Australian Shares Rally on Inflation Relief ASX posts strongest session since August as rate hike fears ease - **Source:** [Sydney Morning Herald - Business](https://www.smh.com.au/rss/business.xml) - **Published:** 2026-09-30 - **Topic:** [Finance](https://brifing.si/c/finance) - **Original article:** - **On Brifing:** https://brifing.si/s/26e28e5c-1412-449a-8ba6-ed732a7e7d0a ## Inflation data sparks rally Australian shares experienced their strongest session since early August after lower-than-expected inflation figures eased concerns about imminent interest rate hikes. The S&P/ASX200 gained 80 points (0.92%) to 8798.3, while the All Ordinaries rose 82.6 points (0.93%) to 8969.2. This rebound followed a shaky morning start, with the market finding relief in softer inflation data that reduced pressure on the RBA's rate trajectory. ## Rate-sensitive sectors lead Consumer retail and real estate sectors, which had been under pressure from high borrowing costs and weak sentiment, rebounded strongly by 2.6% and 3.6% respectively. These interest rate-sensitive sectors outperformed the broader market, dragging nine other sectors higher. The rally provided temporary relief to sectors most vulnerable to monetary policy tightening, though analysts cautioned about persistent underlying risks in the market environment. ## Energy and materials gain The energy sector advanced 1.6%, led by coal miners and Viva Energy, while raw materials gained 0.7% with Rio Tinto rising 1.6% to $166.93. Crude prices showed modest increases amid ongoing Middle East tensions, though they remained below recent peaks as Saudi oil flows recovered from attacks. Gold stocks were mixed, with larger producers generally outperforming smaller ones as prices held steady around $4,180 per ounce. ## Financials show modest growth The heavyweight financial sector rose just 0.3%, with Commonwealth Bank gaining 0.5% to $151.01 after announcing a 0.25% variable home loan rate hike effective October 9. This move aligned with Tuesday's RBA decision. Meanwhile, communications stocks rallied nearly 2%, with REA Group and Seek posting significant gains of approximately 4%, benefiting from improved market sentiment. ## Corporate movers Lendlease shares jumped over 10% after meeting conditions to divest its remaining stake in Keyton Retirement Living Trust to Aware Super. Boss Energy saw similar gains as Peter Botten, former Oil Search MD, became chair of the uranium producer. Northern Star surged 6% on reports of Gold Fields Ltd potentially improving its takeover offer, demonstrating continued M&A activity in the mining sector. ## Currency and global context The Australian dollar slipped to 69.71 US cents from 69.93. Globally, US stocks declined as rising Treasury yields pressured markets, with the S&P 500 down 0.2% and Nasdaq falling 0.1%. Tech giants like Nvidia and Broadcom gave up early gains amid yield increases, with the 10-year Treasury yield reaching 5.25% - its highest in 24 years - partly due to Middle East tensions affecting oil markets. ## Persistent market risks Despite the relief rally, analysts noted ongoing risks including stubbornly high long-term bond yields and oil price volatility. The ASX200 remains down over 3% for September - its first negative month since March. The 'higher-for-longer' interest rate expectation continues to weigh on markets, with energy crises and geopolitical tensions adding to uncertainty, particularly around crude supplies and transport routes. ## Economic outlook Investors await key US economic data that may provide clearer signals about inflation trends and how businesses are adapting to high prices. The Federal Reserve's policy path remains data-dependent, with markets sensitive to any indications of prolonged monetary tightening. While the ASX's strong session offered temporary relief, the broader challenges of elevated yields and geopolitical risks continue to shape market sentiment going forward. ## Sources covering this story - https://www.smh.com.au/business/markets/asx-set-for-a-slow-start-ahead-of-inflation-data-stocks-slip-on-wall-street-20260930-p611kp.html?ref=rss&utm_medium=rss&utm_source=rss_business — --- _Summary written by Brifing from the original reporting. Copyright in the original article belongs to its publisher; read the full piece at the link above._