SYDNEY, AAP – Commonwealth Bank and CSL shares have helped the Australian share market to a record high but some analysts are tipping the fertile environment will be slowly withdrawn from next month.
The Commonwealth Bank, the biggest company on the ASX, hit a record price before Reserve Bank meeting minutes showed favourable conditions may soon be eased.
Biotech company CSL gained 1.71 per cent to $301.72. Healthcare shares were best and climbed almost two per cent.
A broad-based rally helped the benchmark S&P/ASX200 index close higher by 67.2 points, or 0.92 per cent, to 7379.5.
The All Ordinaries closed up by 55.8 points, or 0.74 per cent, to 7633.
The Reserve Bank’s minutes of its June meeting were a popular talking point.
The bank outlined the options for its July decision on whether to continue quantitative easing efforts of buying $100 billion in bonds every six months.
The options were: continuing at the same pace, scaling back or spreading the purchases over a longer period, and reviewing the program more frequently. Stopping was unlikely.
Burman Invest chief investment officer Julia Lee said the decision would influence how much money was moving around the economy.
She said share market conditions were artificially stimulated by quantitative easing and low rates.
NAB economists have tipped the central bank to ease to buying $75 billion in bonds over six months.
Yet easing that stimulus may have consequences.
Ms Lee said: “The markets seem like they’re addicted to low-cost funding, so when you pull back those conditions, there can be a violent reaction”.
US markets overnight rose to record heights.
The US Federal Reserve has a two-day meeting this week and investors will look for signs that bond buying may be tapered.
Rising inflation has become a chief concern in the US after the economy’s rapid recovery from the pandemic.
On the ASX, analytics software vendor Nuix chief executive Rod Vawdrey and chief financial officer Stephen Doyle are leaving.
Mr Vawdrey will continue in his role until full-year earnings are revealed, while Mr Doyle leaves this month.
Nuix, which joined the ASX last year, in February reduced its full-year earnings forecast and shares have steadily fallen.
Shares were up 4.15 per cent to $2.76.
US investment group Oaktree improved its offer to buy James Packer’s shares in Crown Resorts.
Oaktree increased its offer from $3 billion to $3.1 billion and made other changes in its bid for Consolidated Press Holdings’ shares.
Crown shares were lower by 0.57 per cent to $12.15.
Insurer Suncorp has fielded about 3,750 claims from customers following the heavy rain and flash flooding that continues to plague large parts of Victoria.
The claims are mostly for property damage since winds of up to 125km/h and heavy rain lashed the state from Wednesday night. Two people have died.
The insurer, which has brands AAMI, Apia and GIO, said claim numbers were expected to rise for weeks.
Shares were lower by 0.18 per cent to $11.20.
In banking, the Commonwealth hit a record $103.72 then closed higher by 2.06 per cent to $103.45.
Bank of Queensland will reduce the amount of money it sets aside for bad debts by $75 million.
Boss George Frazis said the improved economic outlook meant the bank could reduce its quarterly amount.
Shares were up 1.48 per cent to $8.90.
The big miners were all higher.
Rio Tinto was best and gained 1.23 per cent to $126.48. BHP and Fortescue rose by about half a per cent.
The Australian dollar was buying 77.06 US cents at 1721 AEST, lower from 77.62 US cents at Friday’s close.
ON THE ASX
* The benchmark S&P/ASX200 index closed higher by 67.2 points, or 0.92 per cent, to 7379.5 on Tuesday.
* The All Ordinaries closed up by 55.8 points, or 0.74 per cent, to 7633.
* At 1721 AEST, the SPI200 futures index was trading higher by seven points, or 0.09 per cent, to 7396.
One Australian dollar buys:
* 77.06 US cents, from 77.62 cents on Friday
* 84.80 Japanese yen, from 84.98 yen
* 63.48 Euro cents, from 63.78 cents
* 54.61 British pence, from 54.86 pence
* 107.77 NZ cents, from 107.85 cents.