ASX hovers just shy of record highs
Australia’s sharemarket has closed at about 6850 points for three days in a row this week following its 100-point rally on Monday. This mirrors moves on Wall Street, where indices barely moved after earlier setting new records in the wake of Boris Johnson’s UK election victory and the announcement of a phase one US-China trade deal.
“The price action suggests that the interim-trade-deal induced rally may be taking a well-earned rest for now after the impressive climb in stocks of the last few days,” said senior market analyst Asia-Pacific for OANDA, Jeffrey Halley.
“With low-to-no interest rates now the norm across the globe, that state of affairs in global equity markets is unlikely to last. Valuations may appear nonsensical to many, but the world’s savings glut needs to go somewhere. With trade concerns mollified, for now, dividend yields that are higher than [investors] would get in the bank, mean that the great “melt-up” likely continues well into 2020.”
On Wednesday, the S&P/ASX 200 added just 4 points to close at 6851 points, trading between 6833 points and 6863 points during the day.
National Australia Bank and Westpac weighed on the market with falls of about 0.6 per cent, while Lendlease dropped 3.4 per cent to $18.84.
There was strong interest in Northern Star Resources, which gained 3.3 per cent to $9.97 following a successful $765 million institutional placement at $9 per share. There was also heavy trading in HUB24, which climbed 1.7 per cent to $10.80.
The biggest gains were in Clinuvel Pharma, up 6 per cent to $29, and Galaxy Resources, which climbed 4.5 per cent to 93¢. Corporate Travel tapped a four-month high with a rise of 4.3 per cent to $21.45.
QBE Insurance dived by nearly 6 per cent after issuing a profit warning in the morning, down to $12.52, but recovered during the session to close 1.1 per cent lower at $13.13. The biggest decline was a 5.4 per cent fall in OZ Minerals to $10.92, followed by a 3.9 per cent fall in Virgin Money to $3.69.
The British pound reversed gains made earlier this week with a 1.5 per cent fall. UK and European inflation data comes out later tonight. And Australia’s unemployment rate will be updated tomorrow morning.
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