Strongest finish spurs hopes of growth
At the close, the benchmark S&P/ASX 200 Index was up 18.1 points, or 0.4 per cent, at 4576. The previous closing high of 4571.1 points was struck on October 19 and the market is now nearly 13 per cent higher for the year.
CMC Market analyst Ric Spooner said iron ore and copper prices had been strong in the past few days, giving momentum to the big mining companies.
The market was finishing the year strongly, with investors not as gloomy as they had been, amid hopes of Chinese stimulus in the new year and optimism that the US will somehow resolve their debt-related fiscal cliff negotiations.
"Investors acting on the view that looking forward the most likely scenario next year is moderate growth in most international economies including ours," Mr Spooner said.
"Low interest rates is a newer phenomenon in Australia and taking on more risk, getting into equities or a rebalancing of portfolios towards equities is looking a sensible, alternative moderate growth scenario."
BHP Billiton jumped 46¢ to $35.41, Rio Tinto surged 47¢ to $61.77 and Fortescue gained 16¢ to $4.21.
The owner of the radio station at the centre of the Duchess of Cambridge prank call affair, Southern Cross Austereo, was up 3¢ at $1.07, rebounding from a 5.8 per cent fall on Monday.
Among other media stocks, Ten Network edged higher after the stock fell about 9 per cent on Monday following the first part of its $230 million capital raising.
The price of gold closed at $US1709.39 an ounce, up US74¢.
Meanwhile, the dollar was trading slightly stronger, despite a weak reading for domestic business confidence and ahead of a meeting of the US central bank. Late on Tuesday it was trading at $US104.82¢, up from $US104.78¢.
CMC Capital Markets strategist Michael McCarthy said potentially negative events last week, and a weak business survey on Tuesday, had failed to weaken the dollar.
"We saw a very weak string of data last week, we had an interest rate cut, we saw a strong US dollar, and none of it was enough to get the Aussie dollar down," he said.
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The ASX 200 hit a year-to-date high because stronger commodity prices spurred gains in the big miners, and investors grew more optimistic around Chinese stimulus hopes and a possible US fiscal solution. The article notes iron ore and copper strength gave momentum to mining stocks and helped lift the market overall.
The benchmark S&P/ASX 200 closed up 18.1 points (about 0.4%) at 4,576. The previous high of 4,571.1 was on October 19, and the market was nearly 13% higher for the year at the time of the report.
Big miners rallied: BHP Billiton rose 46¢ to $35.41, Rio Tinto gained 47¢ to $61.77, and Fortescue advanced 16¢ to $4.21. The gains were linked to recent strength in iron ore and copper prices.
CMC Market analyst Ric Spooner said investors were less gloomy and were pricing in a most-likely scenario of moderate growth across international economies next year. He also highlighted that low interest rates in Australia were encouraging some investors to take more risk or rebalance towards equities as a moderate-growth option.
Southern Cross Austereo rebounded and was up 3¢ at $1.07 after a 5.8% fall on Monday tied to the radio prank call affair. Ten Network edged higher after falling about 9% on Monday following the first part of its $230 million capital raising.
Gold closed at US$1,709.39 an ounce, up about US74¢. The Australian dollar was trading slightly stronger — reported at US104.82¢, up from US104.78¢ — despite a weak domestic business confidence reading and ahead of a US central bank meeting.
CMC Capital Markets strategist Michael McCarthy noted that several potentially negative events — a weak string of data, an interest rate cut and other negatives — failed to push the Aussie down, pointing to underlying resilience in the currency at that time.
Investors should watch commodity prices (especially iron ore and copper), miner share performance, signs of Chinese stimulus, developments around US fiscal negotiations, and domestic interest rate trends — all of which were highlighted in the article as drivers of market sentiment and portfolio positioning.
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