The main S&P/ASX200 index was up 36 points by midday, or 0.41 per cent, to 8886.1, as the broader All Ordinaries lifted by 40 points, or 0.45 per cent, to 9008.8.
The Australian dollar spiked to a five-week high of 70.54 US cents, after a higher-than-forecast September headline inflation figure of 4.3 per cent narrowed bets on a Reserve Bank interest rate hike.
The central bank's preferred annual trimmed mean measure edged higher to 3.6 per cent, from a revised 3.5 per cent
"Inflation is becoming the unwanted guest that refuses to leave the party," Global X ETFs senior investment strategist Marc Jocum said.
"Markets have ramped up the probability of a November rate hike from 62 per cent before the CPI release to 80 per cent afterwards, cementing Melbourne Cup Day firmly in the firing line for another rate rise."
Still, resurgent mining stocks have continued to lead the major indices higher.
They have also been bolstered by a revival in AI confidence and slightly softer crude prices amid a relative lull in Iranian attacks on oil tankers.
BHP inched 0.5 per cent higher to $58.28, while Rio Tinto improved to $151.19 on the back of firming copper prices.
The local gold sub-index jumped more than three per cent as the precious metal traded at $US4059 ($A5768) an ounce, while battery minerals and rare earths producers also improved.
Energy stocks dipped more than 1.3 per cent as fossil fuel producers and refinery operators lost ground, however uranium producers continued to rebound.
Softer crude prices bolstered Qantas and Virgin shares, which each rallied by roughly three per cent despite a Qantas ground worker strike and as Virgin cabin crew members voted on industrial action of their own.
The hot inflation print snuffed out an early advance in the heavyweight financials sector, which traded roughly flat by lunchtime as soft insurer stocks counterbalanced modest gains in banks and investment firms.
Consumer-facing stocks were in the red, with discretionaries down 0.6 per cent and falling sharply after the CPI release, and staples down 0.3 per cent despite Woolworths posting resilient sales growth in the September quarter.
In company news, the Federal Court has fined Star Entertainment $260 million for anti-money laundering breaches, with the casino operator's shares still in a trading halt at the time of writing.
Astron will proceed with its Donald mineral sands mining project in Western Victoria, taking its final investment decision with help from a combined $180 million commitment from two government agencies.
The Australian dollar was buying 70.36 US cents, up from 70.27 US cents on Tuesday at 5pm.
