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The ASX 200 has closed just short of 8500 points

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Australian shares hit a new high on Tuesday, driven by renewed economic confidence.

The Australian share market closed at another record high on Tuesday as healthcare and consumer discretionary stocks pushed the market above 8,500 points.

The benchmark ASX 200 index closed up 0.6 per cent at 8495.20 points, a record close, after earlier hitting an intraday high of 8514.50. The broader All Ordinaries index rose 49.70 points, or 0.57 per cent, to 8754.70 points.

The Australian dollar was trading around 64.70 U.S cents.

ASX 200 index closes just below 8,500 points

The ASX closed just below the 8,500 mark on Tuesday. Photo: NewsWire / Max Mason-Hubers

Overall, nine of the 11 sectors closed higher along with the S&P/ASX 200. Healthcare and Consumer Discretionary were the best performing sectors, rising 1.15% and 1.98% respectively over the past five days

Metcash was the best performing stock on Tuesday, rising 7.52 per cent to $3.43. It was followed by Star Entertainment, which rose 7.14 per cent to $22.50, and Block Inc, which rose 5.82 per cent to $143.94 per share.

Three of the four major banks rose in Tuesday’s trading, with ANZ Bank rising the most, up 1.08%, followed by Westpac Banking Corp., up 1.02%, and NAB Corp., up 0.76%. Commonwealth Bank, Australia’s largest bank, fell 0.26.

Iron ore futures in Singapore rose to $104.80 a tonne, with big mining stocks mixed.

Fortescue Metals shares rose 2.05%, while its big iron ore rivals BHP Billiton and Rio Tinto fell 0.15% and 0.19% respectively.

Australian shares also posted strong gains following strong gains in the US. The blue-chip Dow Jones index fell 0.2% to 44,804 points.

But the broader S&P 500 index, which tracks the value of 500 large companies, rose 0.2% to 6,041, while the tech-heavy Nasdaq, which has caught up with the market in recent weeks, rose 1.0% to 19,376.

IG market analyst Tony Sycamore said the Australian share market was heading towards the 8,500 mark, driven by an improving economic backdrop.

Mr Sycamore said: “The ASX 200 index broke through 8,500 points for the first time in history (before falling in late trading), thanks to strong US economic data and dovish comments from Fed Chairman Waller.

ASX 200 index closes just below 8,500 points

The ASX 200 is likely to continue its strong momentum as low liquidity helps push the market higher. Photo: NewsWire / Max Mason-Hubers

“When you combine the strong U.S data, the strong Chinese PMI numbers and slightly better Australian retail sales data, it was a positive day for the local market.”

Mr Sycamore told NewsWire that December is typically a time when markets trade higher as liquidity dries up and large fund managers look to lock in profits for the year.

“The banks will be paying out about $10 billion in dividends, plus $2 billion a month in superannuation payments, so around Christmas that’s $12 billion going into a very illiquid period. These inflows at this time of year add to the positive environment,” he said.

Mr Sycamore said the healthcare sector had been hit by some tailwinds from the US and investors were trying to grab the next sector that could boost the ASX 200.

“We are less sure about resource stocks because of the China factor. The market is happy that the downside risk has dissipated, but we are not convinced that they will rebound from this point.

“Bank stocks are up 35 percent this year. So maybe it’s time to look beyond those two names, and the big health-care names look reasonably valued,” Mr Sycamore said.

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