The ASX 200 hit a record high for the first time since 1 November 2007 on Tuesday thanks to gains across almost all sectors; a key milestone for local equities. The All Ordinaries Index – which hit an all-time high last Thursday – hit fresh record
highs this morning.
While some of the wind has come out of the market’s sails in the past two hours, July is still likely to mark the seventh consecutive month of gains for the ASX 200. The last time local stocks improved for seven months was between March and September 2009 and came after a 35 per cent tumble in the six months prior due to the GFC.
Equities have improved partly thanks to very low interest rates globally, impressive gains in commodity prices and the Federal Election. Risks in the coming month include the US-China trade war, Brexit uncertainty and the profit reporting season in Australia.
The US-China trade talks resume in Shanghai today, around three months after similar talks collapsed. While the market’s expectations seem to be relatively low, any progress would likely be well received by the market.
9 of 12 sectors are edging higher at lunch, with improvements from mining stocks, telcos, property trusts and some banks helping most.
The price of oil rose by 1.2 per cent or 67c to US$56.87 per barrel last night. Ongoing US-Iran tensions and the possibility of US stockpiles easing for a seventh consecutive week helped. While the iron ore price fell overnight, the metal has surged by more than 60 per cent Year-to-Date partly due to concerns of lower supply. Rio Tinto (RIO) is up 0.7 per cent ahead of its half year earnings due this Thursday.
Gold miner Northern Star (NST) is down slightly despite the sale of a record amount of gold between April and June from its mines in WA. The cost of producing each ounce of the precious metal was slightly higher than the US$1225-$1275 range flagged by the company at US$1296/oz.
While infant formula makers surged yesterday following a strong quarterly result from Bubs Australia (BUB), the movements are mixed on Tuesday. BUB is down 2.1 per cent, Bellamy’s (BAL) is slipping by 0.9 per cent while A2 Milk (A2M) is edging higher by 0.5 per cent.
1.7bn shares have changed hands so far today worth $2.3bn. 577 stocks are up, 470 down and 364 are unchanged.
Published by CommSec