Key index dips but stays above 4300
THE sharemarket this week hit its highest level of the year, finally leaping and confidently staying above the 4300 points barrier on the benchmark index. It
THE sharemarket this week hit its highest level of the year, finally leaping and confidently staying above the 4300 points barrier on the benchmark index. Itcapped the best quarterly start to the year for the sharemarket since 2006.For the week, the index was up 95.57 points, or 2.3 per cent, hitting 4343.5 points on Wednesday, the highest close for the year.The S&P/ASX 200 Index yesterday edged down 2.7 points to finish at 4335.2.For the quarter, the sharemarket has gained 6.9 per cent, helped largely by the big banks: the biggest contributors to the rise were ANZ (about 10.8 per cent of the rise), Westpac (8.9 per cent), National Australia Bank (4.5 per cent) and Fortescue Metals (4 per cent).Looking at the charts, since the sharemarket's low on September 26 last year the S&P/ASX 200 has risen by about 12.6 per cent.That might seem quite impressive but in that time the Dow Jones Industrial Average has put on 23.4 per cent and the S&P 500 has surged 27.7 per cent.Fund managers said it would take a lot more for the Australian market to move substantially higher."Our two major mining stocks - BHP Billiton and Rio Tinto - are still in very depressed levels, for various reasons," said SG Hiscock & Co portfolio manager Rob Tucker."So if you're going to see the market move higher you'd have to see them do a fair bit of the work. And that then revolves around China . . . that is what's going to drive the index materially higher, given the domestic economy and other index heavyweights (i.e. banks) still have to deal with a very soft growth outlook."This month we also saw the dollar fall below $US1.04, from US1.08, as the inverse relationship between the sharemarket and the currency became apparent.Currency strategists said the thing that really started to push it down was China announcing a lower annual growth forecast, from 8 per cent to 7.5 per cent odd, given that China's five-year plan, which was out about five months earlier, had a target of 7 per cent.