The Australian sharemarket pressed towards an unprecedented 7400 points on Tuesday as a host of mega-cap stocks set new records of their own.
Fresh highs for the likes of Commonwealth Bank, Wesfarmers, ResMed, Mineral Resources, Domino’s Pizza, and James Hardie helped the ASX 200 add 0.9 per cent and close at a new peak of 7379.5.
A solid Wall Street session lit the way for local investors after the long weekend break, with the S&P500 and Nasdaq also hitting new peaks.
That momentum helped local investors take the benchmark index up by as much as 1.1 per cent to a new intraday high of 7398.6, with blue chip stocks doing the heavy lifting
There was progress for 18 of the market’s top 20 companies – with only Telstra and gold miner Newcrest missing out.
Rio Tinto was the best of the iron ore miners – up 1.2 per cent to $126.48 – while biotech CSL closed at its highest in six months in rising 1.7 per cent to $301.72.
RBC Capital Markets head of equities Karen Jorritsma said it was clear Australian equities remained in good shape, while balance sheets were “as good as they’ve ever been”.
“The number of stocks at record highs… these are blue-chip names, fantastically well-understood companies that are hitting new highs,” Ms Jorritsma said.
“This is not being done by meme stocks or whatever. Australia is in very high-quality shape”.
Tuesday’s third straight record high continues a remarkable 15-month rebound from the nadir of the coronavirus crash.
The ASX 200 index has now added 62.3 per cent – or about $865 billion – to its value since tumbling in the steepest bear market in history, fuelled by an ocean of stimulus cash, low interest rates, and a better-than-expected economic rebound.
Crucially, the recovery has not been accompanied by an inflation boost that could cause the central bank to withdraw its ultra-accommodative policy settings.
Nonetheless, inflation may remains the key risk to equities markets going forward, with Thursday morning’s (Australian time) meeting of the US Fed sure to add colour.
Ms Jorritsma, however, is confident the market can continue on its current trajectory.
“There’s a lot of discussion around inflation and whether it is transitory or not but nonetheless in the meantime things are looking pretty solid… all the data continues to be supportive,” she said.
A gold price dip took the shine off the precious metal miners on Tuesday, with the likes of Newcrest, Northern Star, and Evolution defying an otherwise booming sharemarket advance.
Other notable declines included NewsCorp – down 0.6 per cent to $32.57 and property firm Unibail-Rodamco-Westfield, which dropped 1.6 per cent to $6.33.
Commonwealth Bank finished 2.1 per cent ahead at $103.45 to continue its stellar two-month surge into uncharted territory.
Big Four rival ANZ gained 1.5 per cent to $28.66, while Westpac was up 1 per cent to $26.55 and NAB rose 0.8 per cent to $26.67.
The $63 billion retail behemoth Wesfarmers rose 2.4 per cent to $56.31, and hit a new intraday peak of $56.67, while Woolworths went within a whisker of its all-time high and closed 1.4 per cent ahead at $43.50.
Medical device maker ResMed was the market’s best performer and led health stocks higher, adding 6.8 per cent to a new high of $30.31.
Elsewhere, a rise in investors jumping back into the housing market was noted by the Reserve Bank in board meeting minutes for June released on Tuesday morning.
Acknowledging house prices had continued to rise in all major markets, the RBA board re-emphasised the need to maintain lending standards and careful monitoring of borrowing trends in an environment with strong housing demand, rising prices and low interest rates.
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