Optimism towards the upcoming US earnings season and improved relations between the US and China ahead of the signing of the phase one trade agreement later this week helped Australian shares climb to fresh highs on Tuesday.
The benchmark S&P/ASX 200 rose 58.5 points, or 0.9 per cent, to close at 6962.2, breaking above the previous high of 6933.2 hit late last week. The performance of the local market mirrored strong gains on Wall Street with both the S&P 500 and Nasdaq closing at record highs on Monday.
“The market is running hot and you’d need to have a steel spine to go short,” said James Whelan, portfolio manager at VFS Group. “While money is cheap and the global economy isn’t cactus then the default setting is to buy.”
The rally in US markets came ahead of quarterly earnings results from financial giants Citigroup, JP Morgan and Wells Fargo due before the opening bell on Tuesday. Sentiment was also helped by news the United States Treasury no longer deems China to be a currency manipulator, a notable change of stance before both nations sign off on the first phase of their trade agreement on Wednesday.
Coupled with a strong Chinese trade report for December, those feel-good vibes flowed through to the local market with every sector closing higher on Tuesday, led by gains of more than 1.2 per cent for industrials, utilities, materials and consumer staples.
Supermarket operators were in demand with Woolworths climbing 2.5 per cent to $38.38 while Coles Group added 1.4 per cent to $15.69, coinciding with a bullish analyst note from UBS.
Among the miners, Rio Tinto rose 1.9 per cent to $103.97, BHP Group 1.3 per cent to $40.05 while Fortescue added 1.9 per cent to $10.99.
Among the banks, Macquarie jumped 1.2 per cent to $141.13, closing at record highs. Three of the big four banks finished higher, led by the Commonwealth which rose 0.8 per cent to $83.17. Westpac was the exception, falling 0.1 per cent to $24.57.
Pilbara Minerals was the top performer, soaring 11.4 per cent to $0.39. Other battery material suppliers also enjoyed strong gains on Tuesday.
Pendal Group finished at the other end of the scoreboard, declining 5.1 per cent after reporting further client fund outflows in the final quarter of 2019.
Source: Thanks smh.com