The Australian share market hit a new milestone today as the S&P/ASX 200 index reached an all-time intraday high. Early morning trading saw the index shoot up to 8,148.8 points, surpassing its previous high of 8,148.7. Although it pulled back slightly, the ASX 200 remains in a strong position, staying at 0.29% at 8,145.4 points at 3:12 pm AEST. This rally was driven largely by developments in the US, with significant gains in the Dow Jones and S&P 500 influencing Australian shares.
Figure 1: Performance of S&P/ASX200 as of 3:12 pm AEST (Septemeber 17th, 2024)
Major Index Movements
At the close of yesterday’s session, the ASX 200 was at 8,121.6 points. It opened at that level this morning but surged in early trading. As the day progressed, the market continued to display bullish momentum, driven by key sectors such as real estate, information technology, and energy. The index was buoyed by gains in major blue-chip stocks, particularly in mining, energy, and banking.
In terms of sector performance, 9 out of 11 sectors closed in the green today. The real estate sector led the way with an increase of 0.86%, followed by information technology, up 0.79%, and energy, which gained 0.43%. Other sectors, including financials, utilities, and health care, also saw moderate gains. However, two sectors experienced losses: consumer staples and consumer discretionary.
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Top Performing Stocks
Several companies significantly contributed to the ASX 200’s performance today. Polynovo Limited and Telix Pharmaceuticals Limited were among the top performers, rising 6.12% and 5.33%, respectively. Other notable gainers included Platinum Asset Management Ltd, up 9.60%, and EBR Systems Inc, which rose 7.10%. Appen Ltd and Pacific Smiles Group Ltd also posted strong gains, rising 6.31% and 6.55%, respectively.
Biggest Gainers
– Polynovo Limited (PNV): Up 6.12%
– Telix Pharmaceuticals Limited (TLX): Up 5.33%
– Platinum Asset Management Ltd (PTM): Up 9.60%
– EBR Systems Inc (EBR): Up 7.10%
– Appen Ltd (APX): Up 6.31%
– Pacific Smiles Group Ltd (PSQ): Up 6.55%
Underperforming Stocks
While most of the market rallied, a few stocks experienced declines. Catalyst Metals Ltd was the biggest faller, dropping 6.76%. Wildcat Resources Ltd and Spartan Resources Ltd followed, declining 6.52% and 6.23%, respectively. Serko Ltd, BCI Minerals Ltd, and Develop Global Ltd also posted notable losses, with declines ranging from 4.00% to 6.76%.
Biggest Fallers
– Catalyst Metals Ltd (CYL): Down 6.76%
– Wildcat Resources Ltd (WC8): Down 6.52%
– Spartan Resources Ltd (SPR): Down 6.23%
– Serko Ltd (SKO): Down 5.17%
– BCI Minerals Ltd (BCI): Down 4.84%
– Develop Global Ltd (DVP): Down 4.74%
US Markets Influence ASX Rally
The ASX 200’s surge today was heavily influenced by positive developments in the US markets. The Dow Jones Industrial Average hit a new record, closing at 41,622.08 points, up 0.55%. The S&P 500 also saw gains, rising 0.13% to close at 5,633.09 points. Although the Nasdaq Composite fell 0.52%, the overall sentiment in the US markets was positive, particularly as investors anticipate an interest rate cut by the US Federal Reserve.
Interest Rate Speculation Boosts Optimism
The prospect of a rate cut by the US Federal Reserve has contributed significantly to the bullish sentiment across global markets. Speculation is mounting that the Fed may deliver a 50 basis point cut, rather than the expected 25 basis point reduction. This would mark the first rate cut since the pandemic and is seen as an indication that the US economy is on track for a “soft landing.”
Typically, rate hikes aimed at curbing inflation can lead to economic slowdowns or recessions. However, the US economy has remained resilient, and investors are now feeling optimistic about the future. This optimism has spilled over into the Australian market, pushing the ASX 200 to new heights.
Blue-Chip Stocks Lead the Charge
Blue-chip stocks played a significant role in today’s rally, with several major companies hitting new 52-week highs. BHP Group Ltd, Woodside Energy Group Ltd, and Commonwealth Bank of Australia were among the top performers. Westpac Banking Corp was a standout, gaining 0.7% and hitting a new 52-week high. National Australia Bank Ltd was the only major bank to post a loss, falling 0.13%. CSL Ltd also saw a slight decline, down 0.15%.
The performance of these major players highlights the strength of the broader Australian economy and the increasing confidence among investors.
Foreign Indices Mixed
While the ASX 200 and US markets posted gains, foreign indices presented a mixed picture. The Shanghai Composite fell 0.48%, and Japan’s Nikkei 225 dropped 0.68%. In contrast, Hong Kong’s Hang Seng index rose 0.31%. The divergence in performance across global markets reflects varying economic conditions and investor sentiment, with some regions still grappling with inflation and slower growth.
What’s Next for the ASX 200?
As the ASX 200 continues its upward trajectory, attention will remain focused on global economic trends, particularly developments in the US. If the Federal Reserve does announce a rate cut, it could further fuel optimism and push the ASX 200 to even higher levels. However, ongoing challenges, such as inflationary pressures and geopolitical tensions, could still impact market performance.
In the short term, the Australian market appears poised for further gains, particularly if key sectors like real estate, information technology, and energy continue to perform well. Investors will be closely watching corporate earnings reports and economic data releases in the coming days to gauge the health of the market.
Conclusion
Today’s new intraday high for the ASX 200 reflects the strong performance of key sectors and the influence of positive developments in the US markets. As optimism grows around a potential interest rate cut in the US, Australian shares are likely to continue their upward momentum. With major blue-chip stocks leading the way, the ASX 200 could see further gains in the days ahead. However, investors should remain cautious, as global uncertainties could still impact market performance in the longer term.
