ASX on three-day winning streak after Wall Street ‘buying bonanza’

The ASX continued its winning streak after a Wall Street buying bonanza, with Australian banks still strong, helped by an ‘on fire’ housing market.

The Australian sharemarket surged after a strong lead from Wall Street, and while the local bourse dipped at the close, it gained enough to recoup last week’s losses.

The S&P/ASX200 finished 0.92 per cent higher at 6824.6 while the All Ordinaries Index gained 0.9 per cent to 7090.9.

The US market rocketed higher on the back of improving US vaccine distributions, more evidence US President Joe Biden will push for a larger fiscal stimulus rather than seek bipartisan compromise and companies including Amazon posting solid earnings results.

“Indeed the street has swivelled its focus from ‘GameStop’ to ‘Game-on’ as investors shifted gears from a ‘Turnaround Tuesday’ to a full-on buying bonanza,” Axi chief global strategist Stephen Innes said.

CommSec analyst James Tao said the local market continued its strong run this week, hitting fresh 11-month highs on Wednesday morning.

ThinkMarkets Australia market analyst Carl Capolingua said the winning streak suggested the “GameStop-induced wobble is probably behind us”.

“It’s probably more of a blip than the start of something more sinister,” he said.

“Still, given how unpredictable the WallStBets-led new world order is, you never know.”

Mr Capolingua said it had been a good week so far for banks.

“The housing market is on fire, and this is going to drive better growth through the rest of the year than probably most were predicting,” he said.

The housing market continues to be remarkably buoyant despite the pandemic, so banks are busy. Picture: Lukas Coch/AAP

ANZ appreciated 1.85 per cent to $24.80 Commonwealth Bank advanced 1.16 per cent to $87.59, National Australia Bank firmed 1.94 per cent to $24.71 and Westpac strengthened 1.54 per cent to $21.75.

Energy stocks were up after oil prices hit 12-month highs in overnight trade.

Oil Search lifted 2.02 per cent to $4.04, Origin Energy firmed 1.43 per cent to $4.96 and Beach Energy rose 2.07 per cent to $1.72.

Domain hit a record high of $5.30, up 4.13 per cent, as did fellow real estate media company REA Group, which climbed to $154.98, up 2.69 per cent, after Goldman Sachs said both were among its top media sector picks to buy.

Product packaging company Amcor jumped 4.45 per cent to $15.03 after reporting strong first-half results, higher full year expectations and declaring an improved quarterly cash dividend for shareholders.

Amcor has increased its full year performance expectations.

Virgin Money UK soared 14.63 per cent to $2.82 a day after reporting a return to statutory profit.

Carsales.com was also a strong performer, surging 6.25 per cent to $21.25 after a broker upgrade.

Mr Tao said diversified miner South32 dropped 2.87 per cent to $2.71 after gaining more than 9.5 per cent across Monday and Tuesday, much of it to do with interest in its exposure to silver.

The price of silver leapt to its highest level since 2013 after US investors abandoned GameStop shares and piled into the precious metal.

Rio Tinto backtracked 1.1 per cent to $113.76, BHP was down 2.15 per cent at $44.13 and Fortescue lifted softened 0.22 per cent to $22.66 after the iron ore price retreated below $US150 per tonne.

Mr Capolingua said the steel making commodity traded as low as about US$135-US$140/t in Shanghai on Wednesday morning.

“Iron ore miners are still making good money there, but clearly some of the froth has to come out,” he said.

The Aussie dollar was fetching 76.09 US cents, 55.74 British pence and 63.17 Euro cents in afternoon trade.

Originally published as ASX on three-day winning streak after Wall Street ‘buying bonanza’