The local share market has pushed to a fresh five-month high after gaining ground for a second day in a row.
The benchmark S&P/ASX200 index closed Wednesday up 50.5 points, or 0.7 per cent, to 7231.8, its highest finish since June 3.
The broader All Ordinaries gained 46 points to 7422.4, a 0.62 per cent rise.
“So a pretty solid performance, two straight days of gains,” CommSec market analyst Steven Daghlian told AAP.
“We’re still down for the year but the market, since the start of October, has been eating away at the declines and that’s continued even though last week was a bit of a nothing week as far as moves are concerned.”
The ASX200 is up 5.4 per cent so far this month, building on a six per cent gain in October. It’s only 401 points, or 5.3 per cent, from its all-time high set in August 2021.
“It’s remarkable how quickly things can change – from being down roughly 14 per cent (for the year) in early October, to now being down by two to three per cent – that’s a good couple of weeks potentially away from being flat” for the year, Mr Dahglian said.
“So we’ll see if that can happen.”
It’s hard to put a finger on the reason for the lift in sentiment, Mr Daghlian said, but it could be because of recent US data suggesting inflation has finally peaked there, which would presumably mean less aggressive rate hikes from the Federal Reserve.
The US central bank is slated to release minutes at 6am AEDT on Thursday from its meeting earlier this month that should give further insight into its thinking.
Closer to home, in a speech on Tuesday night, Reserve Bank Governor Phil Lowe outlined a number of the risks to the Australian economy including “stagflation”, a wage-price spiral, a reversal of globalisation and climate change.
“Nothing really significant in that speech that hasn’t already been known by the market – basically reaffirmed recent comments the RBA expects to increase interest rates further and they’ll do what they need to to contain inflation,” Mr Daghlian said.
Nine of the ASX’s 11 sectors gained ground on Wednesday, with a 1.1 per cent decline for technology stocks and a smaller 0.3 per cent dip by property trusts.
Energy was the biggest gainer, rising 1.3 per cent as Brent crude held steady at $US88 a barrel.
Woodside was up 0.9 per cent to $38.78, Beach Energy gained 2.6 per cent to $1.755 and Santos added 0.7 per cent to $7.52.
Coalminers continued to rebound from their sell-off earlier this month caused by Whitehaven warning heavy rain was hampering its open-cut mining operations.
Whitehaven on Wednesday gained 5.6 per cent to $9.62, Yancoal added 3.8 per cent to $5.42 and New Hope rose 2.8 per cent to $5.93.
In the heavyweight mining sector, BHP added 1.0 per cent to $43.92, Rio Tinto gained 0.5 per cent to $105.50 and Fortescue Metals dropped 0.7 per cent to $19.07.
Some well-known consumer brands had a solid day, with JB Hi-Fi up 2.8 per cent to $44.05, Kmart owner Wesfarmers gaining 1.6 per cent to $48.96 and Harvey Norman adding 1.9 per cent to $4.23.
Qantas rose 5.3 per cent to $6.18, its highest level since just before the pandemic, as the flag carrier announced it expects to make $150 million more this half-year than previously predicted as newly unleashed travel demand remains strong.
All the big retail banks were up: NAB 1.1 per cent to $31.30, Westpac 0.6 per cent to $24.08, CBA 0.5 per cent to $108.07 and ANZ 0.2 per cent to $24.73.
In tech, Wisetech Global dragged down the sector, falling 6.7 per cent to a two-week low of $53.84 as founder and chief executive Richard White reaffirmed guidance at the cloud logistics platform’s annual general meeting.
The Australian dollar meanwhile was buying 66.42 US cents, from 66.18 US cents at Tuesday’s ASX close.
ON THE ASX:
* The benchmark S&P/ASX200 index closed up 50.5 points, or 0.7 per cent higher, at 7231.8.
* The broader All Ordinaries gained 46 points, or 0.62 per cent, at 7422.4.
One Australian dollar buys:
* 66.43 US cents, from 66.18 US cents at Monday’s close
* 93.91 Japanese yen, from 93.79 Japanese yen
* 64.34 Euro cents, from 64.48 Euro cents
* 55.88 British pence, from 55.81 British pence
* 107.73 NZ cents, from 108.07 NZ cents.
(Australian Associated Press)