Markets wrap: ASX at near six-week high as Santa rally powers four-session winning streak
A classic Santa rally has lifted the ASX to near six-week highs as investors grow more confident Omicron will not derail the global economy.
A four-session Santa rally has sent the Australian sharemarket soaring into the Christmas break as investors grow increasingly confident the global economy will be able to weather the Omicron storm.
The benchmark ASX 200 followed Wall Street higher in Friday’s holiday-shortened local trade to record its best close in nearly six weeks, adding 32.7 points, or 0.44 per cent, to 7420.3.
The broader All Ordinaries also rose, gaining 37.2 points, or 0.48 per cent, to 7744.7, while the Australian dollar edged slightly higher to 72.36 US cents.
Friday’s session capped a stellar week for the local market – one of its best in the past six months – with a host of blue chip banks, miners and health firms sending investors smiling into the four-day Christmas hiatus.
The traditional pre-holiday jump came after another strong Wall Street session where, according to OANDA senior analyst Edward Moya, the Omicron variant is looking more like a short-term disruption and not a destructive headwind that knocks the world’s biggest economy off its course.
Mr Moya said an overnight dump of data, which was mostly pre-Omicron, had painted a picture that showed economic fears moderating, although growth and inflation remained strong.
“If the US was not battling the Omicron variant, US stocks would be dancing higher as the Santa Claus rally would have kept the climb going into uncharted territory,” Mr Moya said.
“Given all the short-term risks of Fed tightening, Chinese weakness, fiscal support uncertainty and Covid, Wall Street is not complaining as the S&P 500 is less than a percentage point from record highs.”
On local shores, Commonwealth Bank closed 0.5 per cent ahead on Friday at $100.63, while Westpac added 0.1 per cent to $21.20, NAB rose 0.6 per cent to $28.89 and ANZ finished 0.2 per cent higher at $27.46.
Battle-worn AMP was also a major winner, adding 6.4 per cent to $1 after offloading the infrastructure debt arm of its wealth management business to US fundie Ares Management.
Rio Tinto sagged late to dip 0.1 per cent to $99.10, but iron ore rival BHP added 0.2 per cent to $41.32 and Fortescue Metals gained 0.4 per cent to $19.24 to help the mining sector higher.
Gold miners lost a bit of shine but lithium player Pilbara Minerals continued to climb with a 5.3 per cent gain to $2.96.
Telco giant Telstra was near its highest price in more than four years with a 0.7 per cent rise to $4.15 and Sonic Healthcare reached new highs with a 0.3 per cent gain to $46.25.
Supermarkets Woolworths and Coles were rare decliners at the top end of the market – falling 0.5 per cent and 0.2 per cent respectively – to drag consumer staples down.
Respirator manufacturer Resmed also fell, dropping 0.9 per cent to $35.82.
The tech sector was, however, strong in the final session of the week, with Afterpay adding 1.5 per cent to $86.65 and Wisetech Global up 1.4 per cent to $59.50.
The ASX will now be closed on Monday and Tuesday, December 27 and 28, for the weekend’s Christmas and Boxing Day holidays and will resume trading on Wednesday, December 29.
Openmarkets chief executive Ivan Tchourilov said he hoped to see the week’s momentum carried into the new year.
“In the short term, Omicron case numbers will be the main decider on sentiment,” he said.
“However, we won’t be seeing Christmas’s impact until we’re a couple of weeks into January. Expect volatility!”
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