Australian shares climbed on Tuesday's close as the market weighed in on recent domestic economic reports while investors await crucial US inflation data slated for release on Wednesday.

The S&P/ASX 200 rose 0.3% or 23.8 points to close at 8,011.90.

All eyes are on the release of the August US consumer price index data on Wednesday, which may help guide the pacing of proposed rate cuts.

Analysts are expecting annualized headline inflation to weaken to 2.6% in August from 2.9% in July, Reuters reported.

"If the inflation number is any different, or significantly different from expectations, then the number of rate cuts (priced in) will be changed," said Jun Bei Liu, a portfolio manager with Tribeca Investment Partners.

"At the moment, I think the market is reasonably aggressive in pricing quite a lot this side of the year, and so that probably opens up for a bit more... volatility that we have seen in the last couple of weeks," Liu added.

On the domestic front, the Australian Bureau of Statistics said that Australia's seasonally adjusted business turnover indicator across 13 industries rose 1% month over month in July, with transport, postal, and warehousing rising 4% and retail and information media and telecommunications both falling 1.6%.

Westpac said that consumer sentiment in Australia remained downbeat in September amid growing economic concerns and fears about potential job losses with the Westpac-Melbourne Institute Consumer Sentiment Index sliding 0.5% to 84.6 in September from 85 in August.

The National Australia Bank said that business confidence weakened in August, while conditions slumped after a short-lived improvement in the prior month. Business confidence dropped 5 points to negative 4 index points while business conditions fell 3 points to positive 3 index points.

Mining firm Galan Lithium's (ASX:GLN) shares fell 7% to reach a 52-week low on market close, as it is raising up to AU$25 million through a placement and a one-for-four non-renounceable entitlement offer.

Paladin Energy (ASX:PDN) received approval from Fission Uranium's shareholders to acquire the Toronto-listed uranium company via a court-approved plan of arrangement. Its shares rose 6% on market close.

Dimerix (ASX:DXB) enrolled the first patient in an open-label extension study for its kidney disease medication DMX-200 to continue their treatment following the completion of a phase three trial. Shares of the pharmaceutical firm fell 4% on close.