Markets wrap: ASX makes it six straight gains as tech stocks add pre-budget bounce

The Australian sharemarket hit new 11-week highs on Tuesday as investors salivated over the prospect of a market-friendly federal budget.

Technology and healthcare stocks gave the Australian sharemarket a pre-budget bounce on Tuesday as investors salivated over the prospect of some market-friendly announcements from Treasurer Josh Frydenberg.

A strong overnight lead from the US also helped set the tone for the local market’s sixth straight rise, while the banking sector and blue-chip consumer shares also did their part to lift the benchmark ASX 200 to fresh 11-week highs.

The index climbed another 51.9 points, or 0.7 per cent, on Tuesday to finish at 7464.3, getting as high as 7480.9 and touching a mark not seen since mid-January.

That intraday peak was also just 151 points – or about 2 per cent – off the all-time high of 7632.8 set back in August.

The index climbed another 51.9 points, or 0.7 per cent, on Tuesday to finish at 7464.3. Picture: NCA NewsWire/ Gaye Gerard

The broader All Ordinaries, meanwhile, added 57.7 points, or 0.8 per cent, to close at 7747.0, while the Aussie dollar softened slightly to 74.84 US cents at the local close.

City Index analyst Tony Sycamore said consumer-focused names such as Woolworths, Coles, Wesfarmers and Aristocrat Leisure enjoyed the prospect of a voter-friendly federal budget and stronger than expected retail sales data.

The big banks also seemed to rally in anticipation of the pre-election budget – and the prospect of more cash handouts to households – although IG Markets analyst Kyle Rodda said there was unlikely to be much to drive the market higher again on Wednesday.

“Firstly, Australian budgets – other than in emergency situations like we saw during the early stages of the pandemic – tend not to move the markets all that much,” Mr Rodda said.

Westpac was the best of the big four banks with a 1.1 per cent gain to $24.29, while Commonwealth Bank added 0.2 per cent to $106.37, ANZ was up 0.3 per cent to $27.87, and National Australia Bank grew by 0.6 per cent to $32.10. Picture: NCA NewsWire / Kelly Barnes

“Secondly, it’s a pre-election budget, so there’s little to be too scared about.

“Thirdly, a lot of the market moving information has been flagged by the government, and is largely priced-in.”

Taking their lead from Wall Street, where technology stocks outperformed, the local IT sector featured a number of the day’s best performers.

Afterpay owner Block Inc climbed 6.8 per cent to $183.15, Appen rose 6.7 per cent to $7.18, Zip Co was 4.8 per cent higher at $1.54 and healthcare giant Resmed added 4.1 per cent to $32.53 in a stunning session for growth names.

CSL rose 1.4 per cent to $265.60, Sonic Healthcare gained 2 per cent to $35.73 and Cochlear was up 1.4 per cent to $218.88.

Aerial mapping firm Nearmap gained 16.6 per cent to $1.51 after announcing to the market it had started the second half of the year strongly.

City Index analyst Tony Sycamore said consumer-focused names such as Woolworths, Coles, Wesfarmers, and Aristocrat Leisure enjoyed the prospect of a voter-friendly federal budget and stronger than expected retail sales data. Picture: NCA NewsWire / Jeremy Piper

Westpac was the best of the big four banks with a 1.1 per cent gain to $24.29, while Commonwealth Bank added 0.2 per cent to $106.37, ANZ was up 0.3 per cent to $27.87 and National Australia Bank grew by 0.6 per cent to $32.10.

Macquarie Group rose 1.4 per cent to $202.83 and embattled fundie Magellan Financial continued its recovery mission with a 7.1 per cent rise to $15.01.

Other blue-chip winners included Woolworths, which rose 0.9 per cent to $36.86, while Wesfarmers gained 1.8 per cent to $50.65 and Coles was 1 per cent better off at $17.93.

Dragging on the market was mining giant Rio Tinto, which lost 1.4 per cent to $116.84, and BHP, which declined 0.6 per cent to $50.62.

Declining gold prices hurt the likes of Newcrest, Evolution, and St Barbara, but rare earths miner Lynas and lithium players such as Mineral Resources, Pilbara Minerals, Vulcan Energy and Liontown Resources got a boost.

That said, coal miners Whitehaven, New Hope and Yancoal fell, while a 7 per cent drop in crude oil to $US111.69 weighed Woodside Petroleum down by 1.1 per cent to $32.81 and Santos 0.3 per cent lower to $7.92.