ASX 200 jumps 0.9pc to record close

The benchmark S&P/ASX 200 closed at a record 6850.6, beating the previous high made 30 July.

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Australia’s sharemarket surged with the benchmark S&P/ASX 200 closing up 63 points, or 0.9 per cent, to a record high of 6850.6 points.

The index exceeded its previous daily closing basis high of 6845.08 reached on 30 July.

The broader All Ordinaries was up 60.8 points, or 0.88 per cent, to 6950.6 points.

Gains were broad-based, though led by sectors that tend to benefit from extremely low interest rates, including Communications, Utilities, Information Technology and Real Estate.

Telstra surged 2.8 per cent to $3.71 after reaffirming its earnings guidance.

Among other heavyweight stocks, CBA rose 1.2 per cent to $81.69 and BHP rose 1.2 per cent to $38.35.

In mid-caps, Bravura Solutions surged 15 per cent to $4.98 after retaining its earnings guidance and Collins Foods rose 6.6 per cent to $10.36 after its first half earnings report.

The ASX 200 is up 21 per cent year to date with the gains on Wednesday coming as bond yields dived after Westpac chief economist Bill Evans predicted the Reserve Bank of Australia will cut interest rates in February and June, to a record low of 0.25 per cent, before the start of quantitative easing.

Evans said that was likely to be in the form of Commonwealth Government Securities buying by the RBA in the second half of the 2020 calendar year.

Government bonds surged, with the yield on 3-year bonds down 8 basis points to 0.65 per cent and the 10-year bond yield down 6 basis points to 1.02 per cent.

The Australian dollar meanwhile fell by about 0.2 per cent from US67.90c to US67.72c.

“Quite an eventful day for the markets,” said CommSec market analyst James Tao.

Mr Tao said the market was buoyed by record highs set by all three major US indexes overnight and Donald Trump’s comments negotiators were in the “final throes” of work on a US-China trade deal.

“There’s a bit of optimism it can be done before the December 15 deadline for tariff hikes as well,” Mr Tao said.

Every sector rose and seven of the 11 sectors were more than 1 per cent higher, led by telecommunications which was up 2.1 per cent.

Telstra rose 2.8 per cent to $3.71, while TPG rose 4 per cent to $6.85.

Woolworths rose 1.3 per cent to $39.68 after chief executive Brad Banducci gave up a potential $2.6m bonus after the supermarket giant underpaid 5,700 staff for years.

Commonwealth Bank led the big four banks, gaining 1.2 per cent to $81.69, while ANZ gained 0.5 per cent to $25.06 and NAB rose 0.1 per cent to $26.18. Westpac dropped 0.2 per cent to $24.81 for its fifth loss in six days following the bank’s money laundering and child exploitation scandal.

Insurance companies IAG, Suncorp, QBE, NIB and Steadfast all gained between 1.8 and 2.9 per cent, which one analyst said was likely because fund managers were taking money out of banks but needed to retain exposure to the financial sector. Bank of Queensland dropped 4.8 per cent to $7.75 a day after completing its $250m institutional placement at $7.78 per share.

The mining sector rose 1.1 per cent, with BHP rising 1.2 per cent to $38.35, Rio Tinto climbing 1.1 per cent to $97 and South32 up 1.1 per cent to $2.67.

Goldminers showed strong gains as the price of the yellow metal rose against the sagging Australian dollar, with Evolution climbing 5.1 per cent, St Barbara rising 4.4 per cent, Northern Star up 3.5 per cent and Newcrest up 1.5 per cent. Health care was the most subdued sector, only rising 0.3 per cent as CSL gained 0.1 per cent to a new closing high of $279.99.

Fisher & Paykel Health Care gained 3.2 per cent to $20.25 after announcing its half-year profit rose 24 per cent.

Harvey Norman dropped 0.7 per cent to $4.29 after a raucous annual general meeting in which company chairman Gerry Harvey tore into shareholder activist Stephen Mayne and the board received a second strike on executive pay - but managed to avoid a board spill.

with AAP, wires