The benchmark S&P/ASX200 index at noon AEDT on Wednesday was up 55.5 points, or 0.78 per cent, to 7186.5, its highest level since December 15.
The All Ordinaries was up 58.8 points, or 0.8 per cent, to 7395.4.
The gains came even as the Australian Bureau of Statistics reported that monthly consumer prices rose 7.3 per cent in the year to November, up from 6.9 per cent in October and slightly more than economists were expecting.
Inflation equalled a 32-year high set in September, and was seen as reducing the chances that the Reserve Bank would pause its campaign of interest rate hikes.
Still eight out of the ASX's 11 sectors were up at midday, with mining the biggest gainer, climbing two per cent as iron ore futures hovered just under US$120 a tonne, their highest level since late June.
BHP, the Big Australian, was up 2.0 per cent to $48.775, its highest level ever.
Fortescue Metals was up 2.0 per cent to an 11-month high of $22.195, and Rio Tinto was up 1.8 per cent to $120.31.
Also on Wednesday, the ABS announced that retail turnover lifted 1.4 per cent in November to a new record high, as Black Friday sales boosted spending on clothing, footwear, furniture and electronic goods.
JB Hi-Fi gained 2.6 per cent to a six-month high of $46.165, manchester retailer Adairs added 2.7 per cent to a seven-month high of $2.71, and fast fashion jewellery retailer Lovisa Holdings climbed 3.5 per cent to $25.05
In the heavyweight financial sector, Westpac was basically flat but the other three big banks were up. NAB had climbed 1.1 per cent to $30.27, ANZ was up 0.7 per cent to $23.87 and CBA had gained 0.4 per cent to $103.68.
