A closely-watched measure of Australian consumer confidence rebounded strongly in September as lessening fears of a hike in interest rates and better news on the economy helped offset  turmoil on global markets.

The survey of 1,200 people by Westpac Bankand the Melbourne Institute released on Wednesday showed its index of consumer sentiment jumped 8.1 percent in September to 96.9. That followed hefty drops in August and July and still left the index down 14.4 percent on September last year.

"This is a surprisingly strong result," said Westpac chief economist Bill Evans.

He thought it likely that diminished fears of a rise in rates from the Reserve Bank of Australia (RBA) may have helped sentiment. The central bank made it clear last week that it was best for policy to stay on hold while markets were so volatile.