Australian shares rose for a second straight session on Tuesday led by mining and gold stocks, while investors gauged the central bank chief's warning that inflation remained a crucial challenge even as interest rates hit a more than decade high.
The benchmark index S&P/ASX 200 closed 0.3% higher at 7,078.20.
Comments by the Reserve Bank of Australia (RBA) head and minutes from the central bank's Nov. 7 meeting showed deep concern over shifting inflation expectations, warning that rising prices could remain a challenge over the next 1-2 years.
The minutes expressed concern that failure to raise rates this month could lead to unmoored inflation expectations, which outweighed arguments for delaying policy.
The RBA minutes indicate the central bank could still opt for a rate hike, even if they may try not to hike if they can help it, said Matt Simpson, a senior market analyst at City Index.
"Incoming data could decide which side of Christmas a potential hike could arrive. With no meeting in January, a hot CPI (inflation) report next week could seal a 25 basis point Christmas present to the masses."
Heavyweight mining stocks rose 1.6% to touch their highest level since Aug. 7, tracking strong commodity prices.
Mining behemoths BHP Group rose 1.4%, Rio Tinto gained 1.9%, and Fortescue advanced 0.7%.
"Good data from China has been well received and that is being reflected in some key commodity prices, which should help provider further support mining stocks," Simpson added.
Energy stocks rose 0.4%, with Woodside Energy adding 0.5%. Gold stocks gained nearly 2%.
Financials advanced 0.2%, with Commonwealth Bank of Australia rising 0.5% and Westpac Banking Corp gaining 0.3%.
Tech stocks ended flat-to-low, healthcare stocks dropped 0.1%, and real estate stocks fell 0.7%.
The New Zealand benchmark S&P/NZX 50 index lost 0.4% to 11,164.42. (Reporting by Roshan Thomas in Bengaluru; Editing by Rashmi Aich)