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By Kumar Tanishk and Sameer Manekar

Jan 31 (Reuters) - A rally in Australia's heavyweight mining sector pushed the benchmark index past the 8,500 mark at close for the first time on Friday, with higher chances of an interest rate cut next month triggering flows into stocks across the board.

The S&P/ASX 200 benchmark index .AXJO ended the day 0.5% higher at 8,532.30 points. It scaled a record high of 8,566.90 points earlier in the day.

The index gained more than 4% in January, its best month since December 2023.

Miners .AXMM rebounded from a sell-off over the past few sessions as fears around the severity of tariffs to be imposed on China, Australia's biggest trading partner and customer of commodities, abated.

"The market is shifting to a more optimistic outlook for material recovery in demand for key commodities like iron ore from China," said Grady Wulff, a market analyst at Bell Direct.

"The market is very reactive to news of tariffs ... sentiment has moderated and any tariffs will be handled as they arise, not pre-emptively."

The sub-index, which rose 1.1% on the day, gained more than 3% in January to break a three-month losing streak.

BHP Group BHP.AX, the world's largest listed miner, jumped 1.2%. Local shares of top gold miner Newmont NEM.AX soared 3.8%, while domestic heavyweight Northern Star Resources NST.AX jumped 2.6% as gold hit a record high on safe-haven demand.

A benign quarterly inflation print earlier in the week boosted the chances of an interest rate cut by the Reserve Bank of Australia next month.

Markets are currently pricing in a 95% chance of a cut, compared with 70% last Friday. 0#AUDIRPR

That has fuelled a broad-based rally in the equities: discretionary consumer firms .AXDJ jumped 0.6% to end at a fourth consecutive record high on Friday, while real estate stocks .AXRE advanced more than 1%.

Banks .AXFJ gained modestly and clocked over 6% gains this month, their best since July last year.

In New Zealand, the benchmark index .NZ50 ended 0.5% higher at 12,995.01 points.

(Reporting by Kumar Tanishk and Sameer Manekar in Bengaluru; Editing by Mrigank Dhaniwala)

((tanishk.kumar@thomsonreuters.com;Sameer.Manekar@thomsonreuters.com;))

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