The native share market has completed at a contemporary nine-month excessive after its third straight day of positive aspects – its strongest in almost three weeks.
The benchmark S&P/ASX200 index on Friday completed up 46.5 factors, or 0.62 per cent, to 7,558.1, its highest shut since April 21.
The index even had a powerful end to the day, gaining round 25 factors late within the afternoon to shut close to the highs of the day.
Friday was its greatest single-day efficiency since January 16 and for the week, the ASX200 was up 64 factors or 0.86 per cent.
The broader All Ordinaries on Friday rose 43.3 factors, or 0.56 per cent, to 7,771.8.
Saxo Markets Australian analyst Jessica Amir instructed AAP that the market was gaining on the again of Thursday’s hints from Federal Reserve chairman Jerome Powell about an finish to the US central financial institution’s rate-hiking marketing campaign later within the 12 months.
While Powell pushed again in opposition to the potential of a lower in charges in 2023, the market now expects it.
“This is really positive for equities, because we know equities traditionally do well when a central bank is cutting rates,” Ms Amir mentioned.
“Markets are pretty optimistic that these central banks, the US Fed and our bank, the Reserve Bank, they’ll basically take their foot off the gas later this year. And that could could cause a considerable rally in equities.
“So I assume it is risk-on till the proof proves in any other case.”
The other thing driving the rally is major US companies such as Amazon, Meta and General Motors beating quarterly earnings expectations this week, Ms Amir said.
The Australian half-year earnings season starts next week with reports from the likes of Transurban, Suncorp, Mirvac, Boral and AGL.
Another theme playing out on Friday was the US dollar rebounding after weeks of declines, on signs that a monthly jobs report being released on Friday night may beat expectations.
A stronger US economy would allow the Fed to keep rates higher for longer without worrying about tipping the country into recession, Ms Amir noted.
Blood products giant CSL, which makes most of its money in US dollars, climbed 3.0 per cent to $313.81. Cochlear and Fisher & Paykel Healthcare both climbed more than two per cent.
But the stronger greenback put pressure on dollar-priced commodities like gold and iron ore. Gold dropped by about $US35 an ounce, to $US1,915, leading to losses for miners of the yellow metal. Northern Star retreated four per cent and Evolution fell by 3.3 per cent.
Among the big three iron ore mining giants, BHP declined 1.9 per cent to $47.91, Fortescue dropped 1.3 per cent to $21.95 and Rio Tinto subtracted 2.0 per cent to $122.94.
All the big banks were higher, led by ANZ which climbed 2.3 per cent to $25.75. Westpac gained 1.8 per cent to $23.92 and NAB and CBA both added 1.3 per cent, to $31.90 and an all-time high of $111.15, respectively.
IAG fell 2.1 per cent to $4.73 after the insurance giant warned its bottom line would be hit by last weekend’s flooding in Auckland and claims inflation.
It now expects a full-year insurance margin of about 10 per cent, versus expectations of 14 to 16 per cent, after receiving more than 15,000 claims related to the storm in New Zealand’s largest city.
Weebit Nano soared 14.8 per cent to $5.74, a day after its stock resumed trading after being halted for a week over paperwork issues.
The semiconductor company had to head to NSW Supreme Court after issuing shares to a director but failing to tell investors, in what it said was an administrative oversight.
The Australian dollar was buying 70.66 US cents, from 71.42 US cents at Thursday’s ASX close.
Looking forward, on Tuesday the Reserve Bank will hand down its latest decision on interest rates.
Markets were pricing in a 75 per cent chance the RBA will hike rates by 25 basis points to 3.35 per cent, and a 25 per cent chance it will keep them unchanged at 3.1 per cent.
ON THE ASX:
* The benchmark S&P/ASX200 index ended Friday up 46.5 points, or 0.62 per cent, at 7,558.1.
* The broader All Ordinaries added 43.3 points, or 0.56 per cent, to 7,771.8.
CURRENCY SNAPSHOT:
One Australian greenback buys:
* 70.66 US cents, from 71.42 US cents at Thursday’s ASX close
* 90.88 Japanese yen, from 92.10 Japanese yen
* 64.84 Euro cents, from 65.04 Euro cents
* 57.83 British pence, from 57.37 pence
* 109.10 NZ cents, from 109.72 NZ cents.
Source: www.perthnow.com.au
