ASX hits highest close since November 2007

Australian stocks were on a tear in Tuesday’s trade, closing at their highest levels since November 2007.

The ASX has hit its highest close since November 2007. Picture: Bloomberg

Australian stocks were on a tear in Tuesday’s trade, striding firmly higher to close at the benchmark’s highest levels since November 2007.

Catching up with global market optimism after a public holiday on Monday, the S & P ASX200 clocked its second best daily gain for the year, adding 102 points, or 1.6 per cent, to 6546.3.

Meanwhile, the All Ordinaries gained 99 points, or 1.52 per cent, to 6624.4.

The last time the benchmark was at these levels, the market was coming to terms with the impact of the global financial crisis.

Local gains follow a six-day winning streak on Wall Street, including the strongest week for US stocks since November.

“Value was very large today, at $8 billion. But what was amazing about that was we had just 38 block trades worth only $246 million.

“We saw a buying stampede today and institutional buyers just stood back and refused to sell any stock,” Bell Potter’s Richard Coppelson said.

Strength in equities comes amid a growing case for rate cuts, both locally and in the US, after weaker than expected US non-farm payroll data and a soft print on local business conditions.

The May NAB business survey released on Tuesday showed a bounce in confidence to 7 points from 0, largely a result of the federal election, but a slip in business conditions to the weakest levels since 2014.

That’s adding to fuel to calls for a rate cut locally, with all eyes now on Thursday’s labour market data for further confirmation.

Meanwhile, focus in Asian markets turned to US President Donald Trump’s decision to back down on threatened tariffs on Mexico, with hope that he could be more lenient on China.

“This news seems to have created a slither of optimism that having pulled back on this particular threat, Trump could agree not to forge ahead with lifting tariffs on the remaining $300 billion of currently un-tariffed Chinese imports,” NAB head of FX strategy Ray Attrill said on Tuesday.

The two presidents are set to meet at the G20 meeting in Japan later this month, but President Trump has also warned the US is prepared to impose more tariffs if they do not make enough progress.

Asian markets were led by strength in China’s Shanghai Composite, up 2.22 per cent at the local close, while the Hang Seng was trading 0.84 per cent higher and Japan’s Nikkei had closed up 0.34 per cent.

Miners were a driving force behind local market strength, BHP added 2.27 per cent to $38.70, Rio Tinto gained 2.6 per cent to $100.5 and Fortescue edged higher by 3.19 per cent to $8.10.

The major banks pushed higher too, NAB was the best performer out of the big four with a 1.19 per cent rise to $27.22.

Meanwhile Commonwealth Bank added 1.18 per cent to $80.95, Westpac gained by 1.14 per cent to $28.30 and ANZ put on 0.98 per cent to $28.65.

Macquarie finished the session 1.63 per cent higher at $121.15.

The standout performer on the local benchmark was pharma giant CSL, leading the health sector to gains of 3.5 per cent.

CSL surged by 4.27 per cent to set fresh 9 month highs of $212.50.

Across the rest of the health sector, Cochlear added 3 per cent to $206.40, ResMed pushed 3.13 per cent higher to $17.11 and Ramsay Health gained 1.32 per cent to $71.46.

Utilities were the only sector in the red, restrained by a dip in AGL Energy shares after it lobbed a $3 billion takeover offer for telco Vocus Group.

AGL slumped by 7.22 per cent to $19.40 but the target was buoyed on the news, finishing up 8.89 per cent to $4.17.

Star Entertainment Group fell 15.7 per cent to $3.80 on a trading update, warning that a slower second half would drag on its full year earnings expectations.

Gold miners came under selling pressure as softening trade fears put a hold on safe haven buying, pushing the gold price lower.

Regis Resources dropped 4.35 per cent to $4.40, Northern Star fell by 4.22 per cent to $9.54 and Saracen Minerals backtracked by 3.55 per cent to $3.26.

ASX debutant Prospa jumped 18 per cent on its first day of trading, rising to $4.46 after offering shares in its IPO at $3.78.

The Aussie dollar peaked near 0.702 on Monday, but has eased from those levels to hit its lowest in a week at 0.6949. AUD/USD last at 0.6956.