Live markets, Wednesday, June 2, 2021
Gains by mining giants and energy companies propelled the ASX 200 to its best close on Wednesday as better-than-expected economic growth, high commodity prices and technical triggers saw the index close above 7,200 points for the first time in history.
The S & P / ASX200 gained 1.1% to close at a new high of 7217.8 points.
Rising prices for iron ore and oil are putting the market on a solid footing. The index received a boost thanks to better-than-expected GDP numbers, which sparked a technical analysis event that drew algorithmic traders into the market.
Blue chips like BHP gained 3.1%, Woodside gained 4.6% and Santos gained 6.5% in a race fueled by the commodities sector.
“Everything was in unison,” said Jessica Amir, Bell Direct market analyst.
“We had technical traders watching the five-day average and all eyes on economic growth with GDP exceeding expectations.”
She said the minutes of Tuesday’s RBA meeting were “a little white flag” hinting at the end of her bond buying program next month. Yields would likely start to rise, putting growth stocks under pressure as their returns looked riskier.
This saw the IT sector underperform with Megaport down 4.7%, TechnologyOne down 2.8% and Afterpay down 0.9% to $ 92.16.
“This means that from July bank stocks could potentially rise further, as well as insurers,” Ms. Amir said. She added that the ASX200’s short-term moving average broke the long-term moving average late in the morning, which would have been a buy signal for technical traders and would have drawn algorithmic traders into the market.
Banks ended higher, with Commonwealth Bank 0.9 percent and Macquarie Group gaining 1.1 percent.
But the energy sector outperformed, gaining 4.1%, after oil futures peaked in two years on stronger global growth expectations. Oil Search rose 4.6%, Worley 6.5% and Whitehaven Coal 5.4%.
But healthcare company CSL was down 0.4%, ResMed was down 1.7%, and Ansell was down 2.3%.
Gold miners also slowed with Northern Star down 1.1% and Regis Resources down 3.5%.