The Australian sharemarket advanced on Thursday, driven by gains in banking and real estate stocks, despite concerns over rising inflation and the anticipation of an upcoming interest rate hike by the Reserve Bank of Australia (RBA).

The benchmark S&P/ASX 200 climbed 44.5 points, or 0.5 percent, to close at 8891.8, while the broader All Ordinaries index increased 41.2 points, or 0.46 percent, reaching 9012.6 points. Seven of the 11 sectors ended the day higher, with financials and retail among the top performers.

The financial sector led the market’s gains, with major banks recording notable increases. Commonwealth Bank shares rose 2.07 percent to $166.39, National Australia Bank gained 2.33 percent to $41.36, Westpac increased 1.86 percent to $37.21, and ANZ closed 2.16 percent higher at $40.72.

Real estate stocks also supported the upward momentum. Charter Hall surged 3.28 percent to $20.45, Mirvac added 0.83 percent to $1.825, and Growthpoint Properties increased 0.77 percent to $1.96.

Investor confidence was bolstered by a strong performance on Wall Street, where the market responded positively after the Federal Reserve decided to hold the cash rate steady. This provided a favorable backdrop for risk appetite globally.

Domestically, the Australian market largely shrugged off a hotter-than-expected inflation report released on Wednesday. Following the inflation data, money market traders have heightened their expectations for a likely RBA rate increase at the upcoming policy meeting scheduled for Tuesday, with the probability now assessed at more than 80 percent.

Overall, Thursday’s trading reflected investor optimism in key sectors despite ongoing concerns over inflationary pressures and potential monetary tightening.