ASX marches towards key psychological level

The local sharemarket pushed to fresh record highs on Wednesday, brushing aside a soft lead from Wall Street sparked by renewed concerns towards progress in trade negotiations between the US and China in the months ahead.

The benchmark S&P/ASX 200 climbed 32.6 points, or 0.5 per cent, to close at 6994.8, extending its rally so far in 2020 to 4.7 per cent. At one point during the session, the index moved to within a whisker of surpassing the 7000-point level before retreating in late trade.

Another day, another record high for Australia's equity market.
Another day, another record high for Australia’s equity market.

Credit:AAP

“As the index approaches this level, it will likely see some investors review their portfolios, causing them to become more active when it comes to investing,” said Anthony Doyle, global cross-asset investment specialist at Fidelity International. “In reality, there isn’t much difference between the S&P/ASX 200 at 6995 and 7005, but 7000 could represent an emotional trigger point to some investors.”

Despite the reluctance to push the index through this level, it was still a resilient performance from the local market with investors unperturbed by reports that US tariffs on Chinese imports are unlikely to be rolled back before the US presidential election, something that weighed on sentiment on Wall Street and regional Asian markets on Wednesday.

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With the exception of consumer staples, which were weighed down by weakness in supermarket operators, every sector finished higher. The gains were led by industrials which rallied 0.9 per cent. Increases of between 0.4 per cent to 0.7 per cent were booked across all remaining sectors.

By individual stock, gold producers were in demand as bullion prices steadied after several days of heavy losses. St Barbara led the gains on the benchmark, soaring 8.1 per cent to $2.93. Evolution Mining also rallied 5.8 per cent to $3.85.

Shares in rural conglomerate Elders, one of the top performers on Tuesday, continued to climb, lifting by a further 5.7 per cent to $7.18. Agricultural chemicals firm Nufarm, another company closely tied to the performance of the rural sector, also enjoyed a strong session with a gain of 4.2 per cent to $6.20.

At the other end of the score board, lithium miners were hit hard with Pilbara Minerals sliding 7.7 per cent to $0.36. Orocobre also fell by 5.5 per cent to $3.58, in part due to a ratings downgrade by JP Morgan. In contrast to gold stocks over the past week, shares in battery materials suppliers had been running hot prior to Wednesday’s session.

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Source: Thanks smh.com