ASX Flirts With All-Time High

By Glenn Dyer | More Articles by Glenn Dyer

A day after Wall Street hit new highs, the ASX has ended a fresh 11-and-a-half year high on Thursday thanks to a recovery in banking stocks.

The S&P/ASX 200 Index closed 32.5 points, or 0.5%, higher at 6,718 and the All Ordinaries was up 30.7 points, or 0.55, to 6,800.8.

The market traded firmly for most of the session, climbing within 100 points of the all-time high through the middle of the day.

At the close, the index was 110 points or less than 2% away from the all-time high of 6,828.70 hit in November 2007.

Without Wall Street trading overnight Thursday because of the Independence Day holiday in the US, the ASX will probably not reach the all-time high for a week to 10 days.

That’s especially so with all eyes on the US jobs report tonight for June. That could make or break market momentum.

A good report (a high number of jobs) could see a sell-off on Friday, US time, another weak report will raise prediction of a fed rate cut, sending equities higher and US bond yields lower.

The major banks were all better on Thursday, leading the market gains despite investor concerns their margins could be hit by lower interest rates.

Commonwealth Bank shares rose 0.8% to $81.57 (still well away from the most recent high of $83.99 last Friday), Westpac shares added 1.3% to end at $28.25, NAB rose 1% to $26.89 and ANZ finished the session 1.3% higher at $28.16.

SpeedCast International recouped some of its heavy losses from the last two sessions on Thursday announcing its government business had been awarded a US Department of Homeland Security. SpeedCast’s shares jumped 9.9% to $1.89.

It was $3.48 on Monday before the surprise profit downgrade on Tuesday.

Aveo Group shares rose 2.8% to $2.00 after confirming reports it was in exclusive talks with Canadian alternative asset manager Brookfield over a potential takeover.

The company previously said in late June it had been “actively engaged with a preferred party” but had not named the bidder.

Now it’s the acquisitive Brookfield which is also buying Healthscope, the private hospital’s group for $4.4 billion.

Major miners were weaker on Thursday. BHP shares eased 0.6%$41.85, Fortescue Metals Group shares dropped 2.1% to $9.20, Rio Tinto slid 0.8% to $106.20, South32 lost 1.5% to $3.23 and Alumina dropped 1.7% to $2.36 on reports President Donald Trump is getting all antsy about exports of Australian aluminum to the US.

Lithium miners weakened yesterday after Macquarie analysts claimed the supply-side response to the growth in the electric vehicle market had been “wildly in excess of requirements”.

Fairfax reported that the Macquarie analysts noted that recent data suggested demand growth was also slowing and the excessive oversupply could push some players out of the market.

Pilbara Minerals shares fell 5.8% to 49¢, Orocobre slid 2.5% to $2.76 and Galaxy Resources closed 2.6% lower at $1.31. Consolidation here we come?

Glenn Dyer

About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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