The Australian share market has closed at its highest level in almost 21 months.
Weaker-than-expected official data on inflation was good for interest rate-sensitive sectors but failed to nudge the market as a whole.
Official figures show consumer prices rose by a less-than-forecast 2.2 per cent over the year to December.
The Reserve Bank's mandate is to keep down inflation, and that figure is at the bottom end of its target range, so it has room to cut rates.
Economists are divided, however, over whether it will move at its next meeting in February.
The All Ordinaries index added nine points to 4,812 and the ASX 200 index put on nine points to 4,788 - the highest since early May 2011 BHP Billiton jumped 1.3 per cent after a positive fourth-quarter production result.
In the three months to December last year, BHP Billiton recorded a 3 per cent rise in iron ore output to 42 million tonnes.
Its copper and petroleum output also rose, pleasing investors.
Its rival Rio Tinto shed 0.6 per cent.
Shares in building products maker Boral ended flat despite announcing a profit upgrade.
A week after announcing 700 Australian jobs would go, Boral upgraded its profit forecast for the six months to December from $35 million to $52 million.
Fertiliser maker Nufarm was among the worst performers and was down 9 per cent by the close.
It says adverse weather conditions will affect its Australian business this year but maintains its full-year guidance.
Market heavyweight Telstra added 0.2 per cent.
The big four banks ended higher led by ANZ which was up 1.1 per cent by the close.
The Commonwealth Bank gained 0.2 per cent The Australian dollar slipped slightly against the greenback since its peak this morning after official inflation data cleared the way for more rate cuts.
About 5pm (AEDT) it was buying 105.37 US cents, 79.15 euro cents and 66.55 British pence.
West Texas crude oil was $US96.09 a barrel and spot gold was worth just over $US1,692 an ounce.