ASX books best session in seven months with $33 billion surge

The market value of Australia’s top 200 companies increased by nearly $33 billion on Monday as the local bourse notched up its biggest one-day gains since May.  The shopping spree was driven by strong demand for blue-chip stocks and news of a good outcome in the trade negotiations between China and the United States.

However, the trade news did not boost all markets and Australia outperformed other major Asian indices, such as the Hang Seng and Nikkei, which closed lower.

The ASX had its best day for seven months on Monday with strong demand for quality stocks.
The ASX had its best day for seven months on Monday with strong demand for quality stocks. Credit:Tamara Voninski

The S&P/ASX 200 closed 1.6 per cent higher at 6849.7 points, a gain of 110 points. This was just short of the all-time high closing price of 6864 reached on November 28.

Market analyst at Bell Direct, Jessica Amir, says Australia’s market has been underperforming this month compared to Wall Street and is just catching up. The ASX typically increases by up to 2.5 per cent over the summer but is currently only 0.2 per cent higher.


“This December we have actually been underperforming,” she said.

“If we look at the large sell-off that we had on the third and fourth of December, our market is really only just coming back up now and we are really seeing the Santa rally take effect.”

Monday’s rally saw 167 companies close higher and 29 close lower. The declines included plunges in both Perenti Global (formerly Ausdrill) and SmartGroup, which dropped 18.9 per cent and 15.2 per cent respectively, after issuing profit warnings.

There were gains were across the board but the biggest mover was CSL, which added nearly 12 points with a 2.5 per cent gain to close at $285.10, just one dollar short of its all-time high.

And even the banks joined in the rally, with Commonwealth Bank rising 1.7 per cent to $81.46, its highest price in two weeks. Westpac jumped 1.5 per cent to $24.85, NAB lifted 1.5 per cent to $25.52 and ANZ gained 1.38 per cent to $25.05. Meanwhile BHP tapped a four-and-a-half-month high of $39.99 and Rio Tinto closed at $101.78.

And providing a tailwind to sectors sensitive to changes in interest rates, benchmark Australian 10-year government bond yields slipped to 1.16 per cent, over 13 basis points lower than the levels seen last Friday. Similarly, companies with a large proportion of offshore revenues were helped by a reversal in the Australian dollar. The Aussie was trading US68.72¢ late Monday, well below the four-month high of US69.38¢ hit on Friday.

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