If the overnight share futures market is right, the Australian stockmarket could see the first 6,000 reading on the ASX 200 since early 2008 later today.
The ASX 200 rose 0.4% on Friday to close at 5975.5 points, while the All Ords rose 0.4% to close at 5936.3. For the week the ASX 200 was up 2.8% and the All Ords rose 2.6%.
The share price futures contract closed with a gain of 33 points for the lightly traded April contract and 28 points for the more popular June contract.
The local stockmarket first hit 6,000 for the ASX 200 in February 2007, and peaked at 6,828.7 in November of that year, just as the first wave of the subprime crisis was crunching credit markets, forcing Centro, a big shopping centre owner, into default when it couldn’t refinance a US dollar loan.
They were very different days to now and especially last week.
Driving the ASX higher late last week was the euphoria generated by the Fed’s dovish line on US interest rates, which in turn boosted the shares of our big four banks, enabling the market to withstand another sharp fall in global iron ore prices.
Three of the big four banks reached record highs last week, NAB hit its highest level since late 2007.
The ANZ closed up 3.8% at $36.79, the Commonwealth Bank jumped 5.5% to $96.32, National Australia Bank shares were up 4.4% at $39.39 and Westpac added 5.1% to $39.73.
Helping the market today was the strong end to the week on Wall Street and the Fed’s relief rally continued.
US shares were up 2.7% for the S&P 500 and the Nasdaq reached its highest close in 15 years and had a weekly gain of 3.2%, thanks to a solid rise in the price of biotech stocks in particular.
The Nasdaq added 0.7% to end at 5,026.42 at the close of Friday night’s trading.
The Dow rose 168.36 points, or 0.9% to 18,127.39 and 2.1% for the week, while the S&P 500 also rose 0.9% to 2,108.09, and was up 2.7% over the week. Eurozone shares rose 1.5% and Japanese shares were up 1.6%.
Chinese shares also surged 7.2% to their highest since 2008 on indications that the Chinese Government will do more to support growth.
Bond yields generally declined, especially in the US with the 10 year yield down to 1.93%.
The Fed’s dovish comment on interest rates also saw the $US fall back and this saw the $A rise for a while, before easing back to 77.75 USc.
Most commodity prices rose, led by oil and gold.
In fact the fall in the US dollar against the euro was the biggest since 2011, indicating its huge run up against that currency had been overdone.
The US dollar fell sharply on Friday and posted its biggest weekly decline against the euro in more than three years, helping to drive the rally in Wall Street stocks and oil.
