The share market’s benchmark index has risen more than 1.3 per cent to its highest closing level of 2017 as investors put aside their anxieties over US President Donald Trump’s ability to implement his agenda.
Atlantic Pacific Securities client adviser Gary Huxtable said investors are exhibiting little concern over President Trump’s inability to get Congress to back his healthcare reforms, and the potential for a similar scenario for his plans for tax reform.
“If you have a look across the board, screens are flashing green,” Mr Huxtable said.
“It’s a lack of negativity, after we had a little bit of anxiety last week around President Trump’s healthcare deal.
“No one is really expecting anything to happen in terms of the tax reform in the immediate future, so there’s no worries about expectations not being met immediately.”
The benchmark S&P/ASX200 closed at 5,821.2 points, its highest level since May 5, 2015, while the All Ordinaries is just below the near-two year high it hit in mid-February.
Mr Huxtable said most of the heavy lifting on the local share market was done by the big four banks.
They all gained at least 1.5 per cent, and Commonwealth Bank was the best performer, rising by 2.2 per cent.
Mr Huxtable said US bond yields were easing after President Trump’s proposed healthcare reforms were withdrawn from a congressional vote, and that was helping the banks.
There had been concerns funding costs would increase in a higher interest rate environment in the US.
The major banks have also recently lifted their interest rates, and their margins are expected to be higher.
Mr Huxtable said the big miners were helped by higher iron ore futures and oil stocks benefited from OPEC’s announcement that it is trying to extend its production cuts.
BHP Billiton and Rio Tinto each gained 1.5 per cent, while Woodside Petroleum rose 1.4 per cent and Santos improved 1.3 per cent.
Myer fell 5.2 per cent to $1.195 after it said it had not been approached by any prospective buyers, following an investor buy-up that boosted stocks by almost 20 per cent on Monday.
Quintis surged 13.6 per cent to $1.25 after the sandalwood producer’s managing director announced his resignation to join an overseas bidder seeking to acquire the company.
ON THE ASX:
* The benchmark S&P/ASX200 gained 74.5 points, or 1.3 per cent, to 5,821.2 points.
* The broader All Ordinaries index gained 71.2 points, or 1.23 per cent, to 5,860.4 points.
* The June SPI200 futures contract was up 77 points, or 1.34 per cent, at 5,813 points.
* National turnover was 2.8 billion securities traded worth $6.05 billion.
CURRENCY SNAPSHOT AT 1700 AEDT:
One Australian dollar buys:
* 76.1 US cents, down from 76.33 US cents on Monday
* 84.197 Japanese yen, up from 84.17 yen
* 70. 07 euro cents, down from 70.37 euro cents
* 60.61 British pence, down from 60.93 pence
* 108.2 New Zealand cents, down from 108.24 NZ cents
GOLD:
The spot price of gold in Sydney at 1700 AEDT was $US1,253.50 per fine ounce, down $US3.50 from $US1,257.00 per fine ounce on Monday.
BOND SNAPSHOT AT 1630 AEDT:
* CGS 5.25 per cent March 2019, 1.738pct, up from 1.720pct on Monday
* CGS 4.25pct April 2026, 2.642pct, down from 2.643pct
Sydney Futures Exchange prices:
* June 2017 10-year bond futures contract at 97.265 (implying a yield of 2.735pct), from 97.255 (2.745pct) on Monday
* June 2017 3-year bond futures contract at 98.050 (1.950pct), from 98.040 (1.960pct)
(*Currency closes taken at 1700 AEDT previous local session, bond market closes taken at 1630 AEDT previous local session)
