ASX closes in on 8500 points after Tuesday trade

Australia’s sharemarket cracked a fresh record high on Tuesday, on the back of renewed economic confidence.

The Australian sharemarket closed at another record high on Tuesday as healthcare and consumer discretionary shares drove the market towards 8500 points.

The benchmark ASX 200 index closed 0.6 per cent to a record close of 8495.20 points after earlier reaching an intraday record of 8514.50 points. The broader All Ordinaries rose 49.70 points or 0.57 per cent to 8754.70.

The Aussie dollar is trading around US64.70c.

The ASX closes slightly below the 8500 point mark on Tuesday’s close. Picture: NewsWire / Max Mason-Hubers

Overall, nine of 11 sectors ended higher along with the S & P/ASX 200 Index. Healthcare and consumer discretionary were the best performing sector, gaining 1.15 per cent and 1.98 per cent for the past five days

Metcash was the top performing stock on Tuesday, jumping 7.52 per cent to $3.43. It was followed by Star Entertainment, which jumped by almost as much 7.14 per cent to 22.5 cent and Block Inc 5.82 per cent to $143.94 a share.

Three of the big four banks rose during Tuesday’s trading with ANZ leading with a 1.08 per cent rise, followed by Westpac which grew 1.02 per cent and NAB added 0.76 per cent. Australia’s largest bank CBA fell 0.26 per cent.

The big miners were mixed as Singapore iron ore futures rose to $104.80 a tonne.

Fortescue metals traded up 2.05 per cent while big iron ore rivals, BHP and Rio Tinto fell 0.15 and 0.19 per cent respectively.

Australia’s market followed strong growth following a strong day on the US markets. The blue-chip Dow Jones index fell 0.2 per cent to 44,804-points.

But the broader S & P 500 (tracking the value of 500 large companies) lifted 0.2 per cent to 6,041-point while the tech-heavy Nasdaq played catch-up on the market over recent weeks rising, 1.0 per cent to 19,376-points.

IG market analyst Tony Sycamore said the Australian market was moving towards the 8500 point mark off the back of an improving economic backdrop.

“The ASX 200 surged above 8500 for the first time in history [before trading down late], riding a wave of robust US economic data and dovish commentary from Fed Chair Waller,” Mr Sycamore said.

The ASX 200 could continue its strong run as low liquidity helps lift the market higher. Picture: NewsWire / Max Mason-Hubers

“When you put the strong US data into play with strong Chinese PMI data and Australia retail sales coming in a bit better it turned into a positive day for the local market.”

Mr Sycamore told NewsWire December was traditionally a time when markets trade higher as liquidity dries up and large fund managers look to lock in yearly profits.

“The banks will be paying about $10bn in dividends, plus $2bn coming from super every month, so there is $12bn coming into a very illiquid period before and after Christmas. Those inflows at this time of the year add to the positive environment,” he said.

Mr Sycamore said the healthcare sector had some tailwinds coming out of the US and investors trying to front-run the next sector that will lift the ASX 200.

“We aren’t sure about resource stocks because of China. Markets are happy that the downside risk has dissipated but we are not convinced they are going to rally at this point.

“The banks have already run up 35 per cent this year. So maybe it is time to look outside of these two, with the big healthcare names looking reasonably priced.” Mr Sycamore said.

Originally published as ASX closes in on 8500 points after Tuesday trade