Australian Sharemarket Hits Record High; Financials Lead the Rally

December 03, 2024 12:52 PM AEDT | By Team Kalkine Media

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Australian Sharemarket Hits Record High; Financials Lead the Rally — Image source: shutterstock

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Highlights

Australian sharemarket reaches a new all-time high, driven by gains in consumer-related stocks.

Financials sector outperforms, while utilities decline amid mixed performances.

Key companies like Metcash (MTS) and Westpac (WBC) see notable movements.

The Australian sharemarket soared to a record high on Tuesday, marking its third milestone within a week. The S&P/ASX 200 index advanced 0.8% to close at 8514.5, buoyed by robust performance in consumer-related and financial stocks. This latest surge pushed year-to-date gains above 11%, underscoring a strong year for Australian equities.

Among the 11 sectors, financials emerged as top gainers, while utilities were the only segment to record a decline. Shares of AGL Energy (ASX:AGL) and Origin Energy (ASX:ORG) led the utility sector’s pullback, showing modest drops during the session.

Metcash (ASX:MTS) stood out with its best trading day in three years, surging 6.6% to $3.40 after receiving an optimistic outlook on its hardware business. Strengthening earnings potential drove the wholesaler’s significant one-day gain, the largest since 2021.

The banking sector also performed well, with all four major banks seeing upward momentum. Westpac (ASX:WBC) led the group, climbing 2% on renewed investor interest. Strength in the iron ore market further supported materials stocks. Major mining players such as Rio Tinto (ASX:RIO) and BHP Group (ASX:BHP) posted modest gains, while Fortescue Metals Group (ASX:FMG) jumped 2.3%, bolstered by positive economic data from China.

Economic Data and Government Spending

Australia’s current account deficit widened more than anticipated in the third quarter, attributed to weaker resource prices. The Bureau of Statistics highlighted a trade surplus that reached its smallest level since mid-2018. However, an uptick in government spending offset this impact, with infrastructure investments driving public expenditure up by 2.4% for the quarter. These developments contributed 0.7 percentage points to GDP growth ahead of Wednesday’s release of third-quarter data.

Stocks in Focus

Collins Foods (ASX:CKF) faced headwinds, falling 3.3% after lowering earnings guidance for FY25 amid inflationary pressures. Woolworths (ASX:WOW) managed a 0.3% rise despite revealing a $50 million impact on food sales due to ongoing pay-related strikes.

Elsewhere, Steadfast Group (ASX:SDF) rallied 3.6% following a positive compliance review, while Incitec Pivot (ASX:IPL) shed 1.4% after going ex-dividend. Zip Co (ASX:ZIP) also dipped 0.9% on news of leadership changes as its co-founder Larry Diamond announced a shift to philanthropic endeavors.

This record-breaking session highlights the resilience of the Australian market amid mixed economic signals and sector-specific developments.

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