Local investors will be looking to build yesterday’s two year high on the ASX when trading resumes later this morning after solid night on global markets.
The ASX shook off weak leads yesterday from offshore including a weakening iron ore price, and they pushed the key ASX 200 index up 1.3% to a near two year high.
Driving the local gains was another strong day by financials, especially the big four banks.
Investors though will be looking to see the if the identity of the 10% stake in retailer Myer on Monday, is revealed later in the session.
Market reports say it is Solomon Lew who is chairman of Premier Investments and a former shareholder and chair of Coles Myer two decades ago.
The ASX 200 Index ended at 5821.2. It was the highest close since May 2015, while the All Ordinaries Index added 1.2% to 5860.4.
A 25 point rise overnight Monday on the futures market was turned into the biggest one day rise so far in 2017.
Overnight Tuesday saw traders push ASX 200 futures up around 19 points after Wall Street had a much stronger rise than the day before, oil had its first solid gain for a week or more, but gold weakened as the US dollar firmed off the back of comments from Fed deputy chair, Stanley Fischer that two rate rises by the US central bank sounded “about right.”
The Dow ended an eight-day losing streak following better-than-expected economic data, rising 150.52 points, or 0.7% to finish at 20,701.50. The S&P 500 index closed up 16.98 points, or 0.7%, at 2,358.57 and the Nasdaq Composite finished up 34.77 points, or 0.6%, at 5,875.14.
Oil prices rose to week long highs after disruptions were reported from Libya oil regions. In New York, May West Texas Intermediate crude climbed 64 cents, or 1.3%, to settle at $4US8.37 a barrel while in London, May Brent crude was up 58 cents, or 1.1%, to $US51.33 a barrel..
Comex April gold eased 10 cents to settle at $US1,255.60 an ounce after finishing at its highest level in a month on Monday, but then fell more than $US5 an ounce in after ours trading on those comments from the Fed’s Staley Fischer. Copper eased a touch to end around $US2.638 a pound on Comex
The big four banks will once again be key to the market’s performance with their combined weighting of around 30% of the index’s value.
They rose between 1.6% and 2.2%, while the broader ASX200 financials sub index rose 1.8%.
The buying is especially interesting given Westpac, NAB and the ANZ all balance their Marc 31 interim accounts this Friday. There’s renewed confidence in the fortunes of the banks, despite growing concerns about a crunch coming in the apartments sector of the housing market.
Another overnight fall in the iron ore price, which shed 4.1% to $US81.57 a tonne on Monday, didn’t hurt the big miners: both Rio Tinto and BHP Billiton added 1.5%, while iron ore pure-play Fortescue Metals gained 1.3%. The iron ore spot price rose to just over $US82 a tonne on Tuesday.
