Australian share market reaches 12-year high after Coalition victory

He’s only just won the unwinnable election — but Prime Minister Scott Morrison has already caused a multibillion-dollar share market surge.

The share market has soared to a 12-year high after the Coalition’s surprise election win over the weekend.

The so-called “ScoMo surge” led to one of the best gains since the global financial crisis, with shares gaining a staggering $33 billion in value.

Yesterday the benchmark S&P/ASX 200 index was up 97.0 points, or 1.52 per cent, to 6462.3 points yesterday, while the broader All Ordinaries was up 92.8 points, or 1.44 per cent, to 6553.0.

It was a surge few saw coming, with poll after poll tipping a Labor win for months on end.

The S&P/ASX 200 has not been this high since December 14, 2007.

The surge was largely driven by the banks and health insurers after Mr Morrison’s victory ended uncertainty surrounding Labor’s proposed changes to negative gearing, franking credits and other economic policies.

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Together, bank stocks rose by 5.85 per cent, while the big four soared by up to 9 per cent, accounting for more than 80 per cent of the ASX 200’s gains.

Analysts and experts have weighed in on the historic rally, with CommSec market analyst Steven Daghlian saying it had been “a very big day”.

“A very strong day, a lot of money flowed through the markets,” he said.

“It’s not often we see blue-chip stocks gaining 9 per cent in a single day,” CMC Markets chief market strategist Michael McCarthy added.

It was the Aussie share market’s best day in 15 weeks.

The market has rallied following ScoMo’s win.

Retail was also a winner on the day, with Adairs up 5.74 per cent to $1.75, Woolworths up 1.87 per cent to $34.82 and JB Hi-Fi up 5.24 per cent to $26.92.

However, the Aussie dollar had a more lukewarm response to the Coalition’s stunning victory, buying 69.26 US cents, up from 68.89 US cents on Friday.

Mr Daghlian said currency traders would be watching the Reserve Bank’s release of minutes and a speech by RBA Governor Philip Lowe this morning on whether an expected interest rate cut was likely soon.

Meanwhile, Mr Morrison will meet Treasurer Josh Frydenberg today to flesh out the Coalition’s economic plan, with planned tax cuts expected to be the main focus.

“It is a back-to-work day that enables Australians to get back to work,” Mr Morrison said. “We are creating 1.25 million new jobs. The Government will be about those jobs.”

Contact Asset Management portfolio manager Tom Millner told The Australian the election results would boost confidence and stability among consumers and markets alike.

“We really do think the Labor attack on franking credits and other taxes on hardworking individuals and families who were seen to be ‘rich’ impacted the result of this election,” he told the publication.

“This result made it very clear that Australians just want to be rewarded for working hard, and the result in Queensland in particular was a clear indication that the mining community is still very strong.

“The good news is the market can push forward and businesses can have confidence that there’s stability so they can invest for growth. Consumer confidence should return, which will also have a positive effect on the retail and housing sectors.”

— with AAP

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