The local share market has closed at its highest level ever after a bigger-than-expected inflation drop in the United States firmed bets the Federal Reserve will cut interest rates in September.
The benchmark S&P/ASX200 index on Friday finished up 69.7 points, or 0.88 per cent, to 7,959.3, while the broader All Ordinaries climbed 72.7 points, or 0.89 per cent, to 8,206.1.
The ASX200 rose 1.75 per cent for the week, its second straight week of gains, and set its sixth closing high for 2024. Its last record close was 7,896.8, set on March 28.
"So that wonderful 8,000 figure, it's less than a day's trade away from it," City Index analyst Matt Simpson told AAP.
But said if the ASX200 had really wanted to crack 8,000, it could have done so on Friday and there weren't any big macroeconomic data releases scheduled for next week that might be expected to drive it substantially higher.
"I think it might try and take that level - but unless we get a continued catalyst, you might find it a little bit hesitant to do so," he said of the 8,000 mark.
Friday's rally came after the US Labor Department late Thursday reported a bigger-than-expected drop in US inflation, which fell to 3.0 per cent in the 12 months to June, compared to 3.3 per cent in the year to May.
"The outcome suggests that the disinflationary impulse is quickly gathering momentum, supporting the case for US rate cuts in coming months," wrote Westpac senior economist Pat Bustamante.
While a rate cut at the Fed's meeting at the end of July is still considered very unlikely, there's now talk the US central bank might even cut interest rates at its following three meetings, in September, November and December.
Most economists have predicted two just cuts in 2024.
AMP chief economist Shane Oliver said the rally meant the ASX200 had surpassed AMP's year-end target of 7,900, so it was raising the target to 8,100.
Every ASX sector except tech finished higher on Friday.
The interest-rate-sensitive property sector was the biggest gainer, rising 2.0 per cent as Charter Hall climbed 5.2 per cent and shopping centre owner GPT Group rose 5.3 per cent.
In the heavyweight mining sector, BHP dropped 0.4 per cent to $43.40 after the Big Australian announced late Thursday it would temporarily suspend its WA nickel operations because of falling pricing for the battery metal.
Fortescue rose 0.5 per cent to $22.10 and Rio Tinto added 0.2 per cent to $119.83 while lithium developer Liontown Resources rose 3.6 per cent to $1.
Goldminers gained as the precious metal rose $US30 to change hands at $US2,404 an ounce on the prospect of higher US interest rates. Gold looked ready to soon test its all-time high of $2,450, set in May.
All of the Big Four banks finished higher, with NAB rising 2.1 per cent to a nine-year high of $36.95, CBA climbing 1.3 per cent to an all-time high of $131.66, Westpac adding 1.0 per cent to a four-year high of $27.90 and ANZ growing 0.9 per cent to $29.60.
In currency, the Australian dollar was buying 67.61 US cents, from 67.54 US cents at Thursday's ASX close.
ON THE ASX:
* The benchmark S&P/ASX200 index finished Friday up 69.7 points, or 0.88 per cent, at 7,959.3.
* The broader All Ordinaries rose 72.7 points, or 0.89 per cent, to 8,206.1.
CURRENCY SNAPSHOT:
One Australian dollar buys:
* 67.61 US cents, from 67.54 US cents at Thursday's ASX close
* 107.64 Japanese yen, from 109.25 Japanese yen
* 62.25 euro cents, from 62.35 euro cents
* 52.41 British pence, from 52.52 pence
* 110.92 NZ cents, from 110.91 NZ cents.
