Sharemarket smashes records as ASX 200 stalks 7000

Best start to a year since 1986 as Australian shares come within a whisker of the key 7000 level on Wednesday.

The benchmark ASX 200 settled to a record close of 6994.8, up 33 points, or 0.47 per cent for the session to cement a 4.65 per cent year-to-date rise.

Australian shares came within just three points of a key 7000 level on Wednesday, marking the benchmark S&P/ASX 200’s best start to a year since 1987.

Shaking off a weak US lead, the ASX 200 smashed its previous record at the open, and built through the day to hit as much as 6996.8.

The benchmark ASX 200 settled to a record close of 6994.8, up 33 points, or 0.47 per cent for the session to cement a 4.65 per cent year-to-date rise, its best since 1986 (based on the legacy All Ordinaries).

Meanwhile, the All Ords pushed past 7100 for the first time to finish higher by 36 points, or 0.5 per cent, at 7113.5.

The highly anticipated trade deal between the US and China is expected to be signed overnight (at 3.30pm AEDT), and was a key catalyst for sharemarket moves.

“The market is more convinced about the direction of travel than it is about the shape and form of the next step of the deal, so market momentum will be critical to sustaining the rally, as will trade calming headlines,” AxiTrader’s Stephen Innes said.

“Of course, none of this would have been made possible without the Fed’s dovish impulse, and given the lack of policy uncertainty as we move through 2020, the ‘low for longer’ narrative will continue to support risk markets.”

The local market bucked regional weakness as China’s Shanghai Composite slipped 0.63 per cent and the Hang Seng pulled back by 0.82 per cent while Japan’s Nikkei lost 0.6 per cent.

To equities and heavyweight iron ore miners were mixed, even as China’s iron ore futures rose amid worries over cyclone disruption to WA shipments.

BHP lifted 0.3 per cent to $40.18 while Rio Tinto slipped by 0.6 per cent to $103.39 even as JPMorgan tipped the miner as its preferred pick of the bulk miners.

A downgrade from JP Morgan was also a catalyst for a slip in Fortescue, its shares closing down 1.3 per cent to $10.85.

Gold miners led the charge higher as futures gained more than 0.5 per cent.

Resolute was a key standout after confirming the sale of its Ravenswood gold mine for $300m. Its shares finished higher by 0.9 per cent to $1.18, Evolution lifted by 5.8 per cent to $3.85, Newcrest Mining put on 3 per cent to $31.32 and St Barbara jumped by 8.1 per cent to $2.93.

Financials rose across the board, led by a 0.6 per cent lift in Commonwealth Bank to $83.66.

Westpac pushed higher by 0.5 per cent to $24.69, ANZ rose by 0.2 per cent to $25.25 and NAB put on 0.4 per cent to $25.17.

Macquarie set new record highs at $141.67 before closing up 0.3 per cent at $141.51.

In the payments space, Afterpay lost 1.2 per cent to $32.80 on a warning from the Reserve Bank of Australia (RBA) that the buy now, pay later space was starting to be a risk to financial stability.

Peer Zip closed down by 1.7 per cent to $3.57 while Splitit took a 4.9 per cent hit to 68c and FlexiGroup finished flat at $2.07.

CIMIC Group was one of the best performers in the top 200 after reports its Thiess subsidiary could be carved up as part of a sale. Shares in the group added 5.2 per cent to $34.70.

Agriculture services group Elders, and fertiliser maker Nufarm also were among the biggest movers – potentially linked to reports of soaking rains around key cropping areas near the NSW/QLD border.

Elders finished higher by 5.7 per cent to $7.18 while Nufarm added 4.2 per cent to $6.20.

The Australian dollar was 0.06 per cent weaker against the US dollar, buying US68.98c by late in the afternoon on Wednesday.