ASX: Share market closes at 11 year high, investors praise RBA rate cuts
The ASX blew past an 11-year high yesterday, confirming Australia’s position as one of the top performing share markets in 2019 as investors bet Reserve Bank of Australia rate cuts and fiscal stimulus will bolster economic growth and boost company profits.
Yesterday evening the Australian share market closed at a fresh 11-and-a-half year high as a broad rally boosted most sectors by more than one per cent.
The benchmark S & P/ASX200 index finished up 102.4 points, or 1.59 per cent, to 6,546.3 points at 1615 AEST on Tuesday, while the broader All Ordinaries was up 99.2 points, or 1.52 per cent, to 6,624.4.
It was the ASX200’s fifth day of gains in a row and its third-best day of the year.
With Monday’s public holiday, the local bourse had some catching up to do to follow gains overseas, said CMC chief market strategist Michael McCarthy.
But, he added, “I think the size of it has taken some by surprise,” he said.
“We’ve basically been rising from the get-go.”
All sectors had strong gains except the defensive sector of utilities and the subsector of gold mining.
Surprisingly, health care — typically also thought of as a defensive sector — was up the most, by 3.5 per cent.
Pharma giant CSL was up 4.3 per cent to a nine-month high of $212.50. Clinuvel was up eight per cent, Avita Medical up 5.9 per cent and Cochlear up three per cent, while Fisher & Paykel Healthcare bucked the trend and dropped 1.5 per cent.
Mr McCarthy said there may have been overseas money coming into the Australia market as traders bet that a likely US rate cut will depress the greenback against the Aussie.
“These are the stocks that are well-known internationally,” Mr McCarthy said of the health care shares that gained on Tuesday, noting that private hospital and nursing home operators did not gain as much.
Energy stocks were collectively up 1.8 per cent, with Caltex Australia and WorleyParsons both gaining 3.7 per cent, to rise to $27.15 and $13.89, respectively.
Miners were up 1.4 per cent as a whole, with BHP gaining 2.3 per cent to $38.70 and Fortescue Metals up 3.2 per cent to $8.10.
Aerial imaging company Nearmap was the bigger gainer among the ASX200, up 9.4 per cent to a one-week high of $3.50.
The Star Entertainment Group was the biggest loser, sliding 15.7 per cent to a three-and-a-half-year low of $3.80 after the casino operator flagged a full-year earnings dip amid continued weakness in international VIP spending.
Small business lender Prospa Group made its debut on the ASX, closing at $4.46, up 18 per cent on the price of its initial public offering.
AGL Energy dragged the utility sector down after it made a new non-binding $3.02 billion offer for internet provider Vocus, less than a week after a Swedish private equity firm walked away from a takeover of the iPrimus and Dodo brand owner.
AGL shares were down 7.2 per cent to $19.40, while Vocus shares rose 8.9 per cent to $4.17.
The financial sector was up 1.3 per cent, with the four big banks — NAB, ANZ, Westpac and Commonwealth — all up between 1.2 and one per cent.
The Aussie dollar is buying 69.55 US cents, from 69.69 US cents on Monday.
Originally published as Aussie share market’s 11-year high