Australian shares log best day in five months on US rate cut optimism

The much anticipated U.S. consumer price index (CPI) data for April fueled that inflation was easing, prompting traders to raise bets that the will cut in September and December.

Adding to the upbeat sentiment, the Australian unemployment rate rose more than expected in April, a move that was likely to douse any chance of rate hikes.

"Australia's unemployment rate rose to 4.1%, easing recent pressure on the to hike rates again, for now. The data release has also lifted expectations for rate cuts early next year," said Josh Gilbert, market analyst at .

In the resource-heavy bourse, bellwether miners soared 1.3%.

Mining behemoth gained 1.4% while advanced 1%.

Rate-sensitive financials rose 1.9%, snapping a three-day losing streak.

All "Big Four" banks gained between 1.5% and 2.3%, with ANZ Group rising 2.3%.

added 1.5%, with biotech giant CSL gaining 1.2%.

Gold stocks jumped 2.4%, tracking higher bullion prices.

Evolution Mining gained 2.5% while Northern Star added 2.4%.

Information technology stocks rose 3.3%, tracking U.S. peers, while real-estate stocks jumped 3.4%, with Goodman Group gaining 4.6%.

New Zealand's benchmark S&P/NZX 50 index snapped a three-day losing streak and closed 1.8% higher at 11,728.0600.

Focus is now on the Reserve Bank of New Zealand's cash rate policy decision, due next week, to get clarity on the central bank's rate-cut trajectory.