ASX hits record high as bull market shifts up a gear
Australian shares powered to fresh a record high on Friday, fuelled by another record close on Wall Street, a strong set of retail sales figures and easing geopolitical concerns in the Middle East.
The benchmark S&P/ASX 200 index rallied 54.8 points, or 0.8 per cent, to close at 6929 points, after surpassing the previous intraday record high of 6893.7 set in November last year shortly after the market opened. Buying was widespread, with 138 of the 200 companies within the index booking gains for the session.
For the week, the benchmark jumped 2.9 per cent, the largest increase since early February 2018. Year to date, the market has already gained 3.7 per cent, adding to the 18.4 per cent advance recorded in 2019.
“Sharemarkets pushed sharply higher as the US and Iran appeared to step back from escalating their conflict,” said Shane Oliver, AMP Capital’s head of investment strategy and chief economist. “This saw US shares push to a new record high and the positive global lead saw the same in Australia with the local market breaking more decisively above its pre-GFC high.”
The gains on Friday were led by the healthcare sector, which jumped by 2.1 per cent, hitting fresh record highs in the process.
Much of the gain reflected strength in CSL shares which closed at a record high, lifting by a further 2.8 per cent to $299.30. The biotherapeutics giant has soared 9.3 per cent from the lows hit earlier in the week, taking its market capitalisation to an eye-watering $132.3 billion. That helped the broader healthcare sector gain 6.5 per cent for the week.
Outside of healthcare, the information technology and communication services sectors also gained more than 1 per cent, the latter helped by an 8.1 per cent spike in Vocus Group to $3.20 on news its CEO had purchased close to $600,000 worth of the company’s shares on Thursday.
Consumer stocks were also in high demand, supported by a 0.9 per cent increase in Australian retail sales in November, the largest gain in two years.
“Retail sales came in much stronger than expected on what looks to be a combination of Black Friday sales and some delayed effect from policy stimulus measures,” Westpac senior economist Matthew Hassan said.
Consumer staples jumped 1.6 per cent, led by Bega Cheese which gained 4.5 per cent to $4.41, after it said disruptions to its operations from bushfire activity were minimal. Consumer discretionary added a smaller 1.1 per cent, with Harvey Norman the standout performer with an increase of 4 per cent to $4.42.
Financials also had a strong session, lifting 0.9 per cent on the back of gains in each of the big four banks. Commonwealth Bank was the best performer, rising 1.2 per cent to $82.50. Macquarie Bank also closed at a record high, climbing 0.9 per cent to $140.35.
Materials managed to buck the broader bullish trend, finishing down 0.4 per cent on the back of weakness in the iron ore miners following a large fall in spot prices overnight. BHP slipped 0.3 per cent to $39.90, while Fortescue skidded 1.1 per cent to $10.70. Rio Tinto clawed back earlier losses to close up 0.2 per cent at $102.43.
The worst performing stock on the benchmark index was gold producer Resolute Mining, which tumbled 9.1 per cent to $1.105 on the back of continued weakness in bullion prices. Evolution Mining was also pressured by lower risk aversion and a production update that disappointed investors, sliding 6 per cent to $3.58.
David Scutt covers markets for The Sydney Morning Herald and The Age
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Source: Thanks smh.com