ASX rises sharply ahead of holidays, breaks days-long losing streak amid US inflationary outlook

The ASX has surged back and broken a days-long losing streak - after better than expected inflationary data out of the US sent markets higher around the world.

The ASX has surged back to form on the back of better-than-expected inflationary data out of the US - following hitting a three month low just days ago.

The ASX 200 index rose 134.6 points or 1.67 per cent to 8,201.6 on Monday. The broader All Ords is also strongly up, trading 1.64 per cent higher at 8457.70 points.

The Australian dollar was trading around US62.57 cents.

On a day with a sea of green, all 11 sectors grew, with only 16 companies in the ASX 200 index finishing Monday’s trading in the red.

The Aussie market surges on better than expected inflation data. Picture: NewsWire / Max Mason-Hubers

The surge was led by the financial sector and the big four banks.

Commonwealth Bank traded 2.94 per cent higher to close the day out at $154.68 while ANZ and National Australia Bank rose by more than 2 per cent each.

Westpac was the weakest of the four rising 1.96 per cent to $32.29.

News Corporation and Telstra made gains after announcing they were selling their Foxtel business for $3.4 billion.

News Corp rose by 3.26 per cent to close the day at $50.66 while Telstra lagged the market up just 1.1 per cent.

IG’s market analyst Tony Sycamore said today’s growth is coming from a low base but it is ‘starting to look a lot like Christmas’.

“The ASX200 pulled back a healthy 463 points or 5.4 per cent. from its December 8514 high to last Friday’s 8051 low. This marks the ASX200’s first 5 per cent pullback since August and a continuation of the two step forward one step back type price action viewed in 2024,” he said.

Mr Sycamore said Australia’s market was similar to much of Asia which is all trading higher during Monday’s trading.

Hong Kong’s Hang Seng and China’s Shanghai composite were both up 0.7 per cent during mid-afternoons trading, while the Japanese Nikkei grew 1.1 per cent.

“Asian equity markets are bathing in a sea of green today, led by the ASX200,” Mr Sycamore said.

Australia’s market followed the big three indices in the US being the S & P 500, the Dow and the Nasdaq which all grew by more than 1 per cent after marginally weaker-than-expected inflation.

The ASX leads the Asian markets on a strong day all around.. Picture: NewsWire / Max Mason-Hubers

While there was strong growth, it did follow the major indexes dropping more than 3 per cent on Thursday after the Federal Reserve signalled that interest rates might stay higher in 2025.

“Friday night’s Core inflation data was better than expected, easing concerns after last week’s Fed meeting. Core inflation stayed at 2.8 per cent year on year in November, below the 2.9 per cent expected,” Mr Sycamore said.

“The US Senate passed legislation over the weekend to extend public funding and end a brief government shutdown. While Congress might try to address the debt limit early in the New Year, the actual deadline for debt limit action is thought to be around July 2025. So, there is plenty of runway there now.”

In company news shares in Super Retail Group, the owner of retail brands Supercheap Auto, rebel, BCF and Macpac, jumped nearly 5 per cent to $15.49 after notching partial victory in its whistleblower case.

The ASX is closed on Christmas Day and Boxing Day this week, following an early close of 2.10pm AEDT on Christmas Eve.

Originally published as ASX rises sharply ahead of holidays, breaks days-long losing streak amid US inflationary outlook