(Australian Associated Press)
The Australian share market has rallied to its highest level since March 6, with gains across nearly every sector on a wave of optimism about Australia’s economic prospects.
The S&P/ASX200 benchmark index finished Wednesday close to the highs of the day, up 106.5 points, or 1.83 per cent, at 5,941.6 points, while the All Ordinaries index gained 104.8 points, or 1.76 per cent, at 6,064.9.
“What an incredible performance, it’s just phenomenal,” said CMC Markets chief market strategist Michael McCarthy.
“I can’t reconcile this with the information from companies and the macro performance we’re seeing, but the market is always right.”
The gains were being driven by retail investors, Mr McCarthy said.
“Institutional and professional investors were caught out by the rally and some of them have been forced to scramble,” he said.
With the price action this strong, further gains were likely in the next several days, Mr McCarthy said.
The ASX200 is now up 35 per cent from its March 23 nadir of 4,402.5, and down just 17.4 per cent from its all-time peak of 7,197.2 set on February 20.
Every sector was up except health care, which edged 0.07 per cent lower as CSL declined 0.4 per cent to $283.55.
Mr McCarthy said the sector’s lack of support pointed to the idea that investors are looking for beaten-up stocks and sectors.
Goldminers also suffered during the strong risk-on session, with the five worst-performing ASX200 components all extractors of the precious yellow metal.
Silver Lake, Regis, Gold Road Resources, Saracen and Evolution dropped by between 8.4 per cent and 5.8 per cent, while Northern Star fell 5.5 per cent and Newcrest dipped by 2.3 per cent.
Diversified miners performed better, with South32 gaining 6.9 per cent to $2.16, Rio Tinto adding 0.5 per cent to $97.42 and BHP advancing 2.6 per cent to $36.34.
Zip Co soared another 22.1 per cent to an all-time high of $6.35, on top of Tuesday’s 38.7 per cent gains following the buy now, pay later company’s acquisition of US-based QuadPay.
“That is just eye-watering,” Mr McCarthy said, noting the gains gave Zip a market capitalisation of $2.5 billion.
Rival Afterpay added 5.5 per cent to an all-time high of $52.26 – up more than six-fold from its March 23 nadir of $8.01 – while others in the buy now, pay later space also shone.
Flexigroup added 6.0 per cent, Sezzle rose 7.3 per cent, Splitit gained 4.7 per cent and Openpay soared 51.8 per cent to an all-time high of $3.02 – up nine-fold from its March 23 low of 32 cents.
“I’m going to call this a bubble,” Mr McCarthy said. “That is bubble behaviour.”
Elsewhere, the banks all had a strong day, with Commonwealth up 3.3 per cent to $66.11, ANZ up 5.0 per cent to $18.92, NAB gaining 4.6 per cent to $18.70, and Westpac adding 4.4 per cent to $17.95.
Shares in energy provider Infigen have surged by 36.4 per cent to 80.5 cents after a $777 million takeover bid from Australian investment group UAC Energy Holdings.
UAC, majority-owned by AC Energy Group, is offering 80 cents per Infigen stapled security.
Telecommunications provider Amaysim had its shares spring by 16.7 per cent to 42 cents after declaring it would buy OVO Mobile.
Amaysim, Australia’s fourth-largest mobile provider, paid $15.8 million for the company and its 77,000 customers.
Seven West Media gained three cents, or 28.6 per cent, to 13.5 cents.
SWM shares are up 57 per cent this week and in response to a query from the ASX, the media company said it had no explanation for the rise.
Auckland Airport gained 4.9 per cent to $6.40, Sydney Airport advanced 3.6 per cent to $6.12, and toll road operator Transurban rose 2.3 per cent to $14.95 in a good day for industrial stocks.
Meanwhile the Australian dollar hit a five-month high of 69.84 US cents after the Australian Bureau of Statistics announced the country’s economy contracted just 0.3 per cent in the March quarter despite the lockdowns and the bushfires.
Later it pulled back from that level and at 1718 AEDT, one Australian dollar was buying 69.37 US cents, up from 68.02 US cents at the close of trade on Tuesday.
ON THE ASX:
* The benchmark S&P/ASX200 index closed Wednesday up 106.5 points, or 1.83 per cent, at 5,941.6 points
* The All Ordinaries also closed up 104.8 points, or 1.76 per cent, at 6,064.9 points
* At 1723 AEST, the SPI200 futures index was down 17 points, or 0.29 per cent, at 5,909 points
One Australian dollar buys:
* 69.37 US cents, from 68.02 US cents on Tuesday
* 73.38 Japanese yen, from 73.31 yen
* 61.79 euro cents, from 61.13 cents
* 55.04 British pence, from 54.29 pence
* 108.11 NZ cents, from 108.44 cents.