Record highs on Wall Street lift confidence
Investors appear increasingly confident equity markets will be able to withstand an inevitable reduction in stimulus from the US Federal Reserve in coming months.
On Monday, the benchmark S&P/ASX 200 Index added 16.9 points, or 0.3 per cent, to 5352.8 after taking a positive lead from the US, where the S&P 500 closed at a record 1804.76 points and the Dow Jones rose to a record 16064.77.
"Both the S&P 500 and Dow Jones in record territory is proof that positive economic data is finally being recognised as a good thing, rather than making the market nervous that signs of growth could make tapering more imminent," Arnhem Investment Management head trader Simon Twiss said. "The US housing starts and consumer confidence numbers [due for release on Tuesday night Australian time] are likely to be a focus for investors this week because of their ability to influence when the Federal Reserve starts winding back the value of its asset purchases."
Healthcare was the best-performing sector, up 1.2 per cent, as several exchange rate-sensitive health stocks benefited from a fall in the dollar to US91.47 at the local close, down from US91.76 at Friday's close.
Commonwealth Bank dropped 0.3 per cent to $76.27, while ANZ rose 0.4 per cent to $31.79, National Australia Bank added 0.5 per cent to $34.10 and Westpac edged up 0.1 per cent to $32.52.
Goodman Fielder shed 7.1 per cent to 65.5¢. Warrnambool Cheese & Butter Factory added 2 per cent to $9.23 after Canadian suitor Saputo raised its offer to $9.20 a share.
Australia's two biggest miners closed higher after the spot price of iron ore, landed in China, added 0.2 per cent to $US136.50 a tonne. BHP Billiton rose 0.2 per cent to $37.89, while Rio Tinto gained 0.2 per cent to $65.40.
Goldminers suffered as the spot price of gold dipped to $US1239.05 at the local close. Energy stocks were mostly lower as the Brent crude oil price fell 2.3 per cent to $US108.53 a barrel.
Frequently Asked Questions about this Article…
Record highs on Wall Street are boosting global investor confidence because they signal positive economic data and growth, which reassures investors that equity markets can withstand potential reductions in stimulus from the US Federal Reserve.
The S&P/ASX 200 Index recently added 16.9 points, or 0.3 percent, reaching 5352.8, following a positive lead from the US markets.
In the current market environment, the healthcare sector is performing well, with a 1.2 percent increase, as several exchange rate-sensitive health stocks benefited from a fall in the dollar.
Major Australian banks have shown mixed performance: Commonwealth Bank dropped 0.3 percent, ANZ rose 0.4 percent, National Australia Bank added 0.5 percent, and Westpac edged up 0.1 percent.
Goodman Fielder's stock price shed 7.1 percent, reflecting market reactions to recent developments, although specific reasons for the drop were not detailed in the article.
The spot price of iron ore, which increased by 0.2 percent to $US136.50 a tonne, positively impacted Australia's biggest miners, with BHP Billiton and Rio Tinto both rising by 0.2 percent.
Gold miners are suffering due to a dip in the spot price of gold to $US1239.05, while energy stocks are mostly lower as the Brent crude oil price fell by 2.3 percent to $US108.53 a barrel.
Investors are focusing on US housing starts and consumer confidence numbers, as these can influence when the Federal Reserve might start reducing its asset purchases.
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