ASX 200 at all-time high: What fueled the market rally

Summary

  • The ASX 200 was trading higher at 7,387.50, up 75.20 points or 1.03% by Tuesday afternoon.
  • The index headed towards 7,400, led by a strong rally in healthcare, tech, financial and consumer staples stocks.
  • Healthcare firm ResMed Inc was the top gainer on the ASX, while vessel builder Austal was the top laggard.

The Australian share market was trading at a record high by Tuesday afternoon, with the index heading towards 7,400 in a blue-chip rally, led by Rio Tinto, Fortescue Metals, Resmed, Transurban and Woolworths. The market witnessed broad-based buying, tracking overnight gains in Wall Street, ahead of the US Federal Reserve meeting for further clarity on inflation and monetary policy going forward.

The ASX 200 was trading higher by 75.20 points or 1.03% at 7,387.50. Earlier today, the index opened 7.20 points higher at 7319.50, following a reasonably positive trade by the US shares overnight. The Australian share market was closed on Monday on account of Queen Elizabeth’s birthday.

On the sectoral front, 10 of the 11 sectors were trading higher, with Healthcare gaining the most, rising as much as 2.22%. Other sectors that were trading higher include Information Technology, Materials, Industrials, Consumer Discretionary, A-REIT, Utilities and Telecommunications Services. Bucking the trend, energy sector was a rare weak spot, trading lower with marginal loss.

                     

The Mid Market Pulse || ASX 200 At All-Time High: What Fueled Market Rally?

 

Tech stocks extended gaining streak on the benchmark, tracking overnight gains in the US counterpart, with buy-now-pay-later firm Afterpay and software maker Xero rising over 1.5% each.

ASX-listed gold stocks were among top laggards today, with sub-index dropping as much as 3.2%, on track to post their biggest intraday percentage loss since 4 June. The gold stocks slipped on Monday as some investors feared the US Federal Reserve may scale back its expansive monetary policy at a two-day meeting this week.

Sector heavyweight Newcrest Mining Limited (ASX:NCM) lost as much as 2.9% while De Grey Mining Limited (ASX:DEG) dropped as much as 8.1%. Gold Road Resources Limited (ASX:GOR) dropped 6.2%.

Top Gainer and Losers

Healthcare firm ResMed Inc (ASX:RMD) is the top gainer on the ASX, rising 7.5% to AU$30.50. Some of the other notable gainers are A2 Milk Company Limited (ASX:A2M), Iluka Resources Limited (ASX:ILU), Premier Investment Limited (ASX:PMV) and ZIP Co Limited (ASX:Z1P), rising between 3.5-7%.

Meanwhile, Eagers Automotive Limited (ASX:APE) was the top percentage loser on ASX, falling 3% to AU$15.51. Stockland (ASX:SGP), EML Payments Limited (ASX:EML), Reliance Worldwide Corporation (ASX:RWC) and Iress Ltd. (ASX:IRE) were some of the other laggards.

Australian vessel builder Austal Limited (ASX:ASB) is top laggard on the ASX, falling 7.9% to AU$2.14. Pilbara Minerals Limited (ASX:PLS), PointsBet Holdings Limited (ASX:PBH), Ramelius Resources Limited (ASX:RMS) and Gold Road Resources Limited (ASX:GOR) are among top losers, falling between 4-5%.

Shares in News

Shares of Gold miner Chalice Mining Limited (ASX: CHN), lithium producer Orocobre Limited (ASX: ORE) and real estate investment trust Uniti Group Limited (ASX: UWL) will remain in focus today. These three stocks will be included in ASX 200, effective prior to the open of trading on June 21, 2021, and follow its June quarterly review.

Among others, global shipbuilder and prime defence contractor Austal Limited (ASX: ASB), miners Perenti Global Limited (ASX: PRN) and Resolute Mining Limited (ASX: RSG) will be excluded from the index from the said date.

ASX 50 and ASX 100 will also see changes in reshuffle of their constitutes as part of its periodic review. Gold miner Northern Star Resources Limited (ASX: NST) will join the ASX 50 index next week, replacing commercial explosives and blasting systems provider Orica Limited (ASX: ORI).

In ASX 100, retailers Harvey Norman Holdings Limited (ASX: HVN) and Metcash Limited (ASX: MTS) will be added as part of the quarterly rebalance. These stocks will be replacing artificial intelligence data services provider Appen Ltd (ASX: APX) and telco TPG Telecom Ltd (ASX: TPG).

Biotech firm Argenica Therapeutics (ASX:AGN) made a disappointing debut on the ASX on Tuesday, falling 15.4% to 22 Australian cents. The company’s shares listed on the ASX today after raising AU$7 million via IPO at a market capitalisation of AU$14.6 million. 

Shares of Isentia Group Ltd (ASX:ISD) rose as much as 157.4% to 17.5 Australian cents on buyout deal with Access Intelligence. The media intelligence firm has entered into a preliminary agreement to be acquired by LSE-listed Access Intelligence Plc for 17.5 Australian cents per share in cash. The company said the offer implied an enterprise value of AU$67 million based on a AU$35-million equity value and AU$32 million net debt balance, as of 31 May 2021.

The share price of Japara Healthcare Limited (ASX:JHC) gained as much as 5.1% to AU$1.24, hitting its highest mark since 16 September 2019. The aged-care facilities operator has received a buyout proposal from not-for-profit home-care provider RSL Care RDNS Limited, part of the Bolton Clarke Group, valued at AU$326 million.

Broo Limited (ASX:BEE) shares dropped as much as 11.1% to 1.6 Australian cents after the company entered into a contract to sale its Ballarat Property in Victoria. The company said in a release on Tuesday that this is a contract between its wholly owned subsidiary, Broo Brewery Pty Ltd (Broo Brewery), and Bentley Property Group.

Azure Minerals Limited (ASX:AZS) has shared that it had discovered seven drill hole intersects with significant Ni-Cu sulphides at the VC-07 mineralised corridor on the Andover Project. Following the announcement, its shares gained 3.7% to 28 Australian cents.

Eden Innovations Ltd (ASX:EDE) on Tuesday shared an update on continued EdenCrete  sales and marketing progress in the Colorado infrastructure market. The company shared that EdenCrete had been specified in shotcrete that is to be used in the restoration of East Portal of Moffat Tunnel. Boosted by the development, shares of Eden Innovations rose 4.35% to 2.4 Australian cents.

Asian Markets Rise in Early Trade

Asian markets traded higher in opening deals, tracking firm cues from Wall Street, which ended higher overnight. The caution lingered in the market ahead of the US Fed meeting this week.

Japan's Nikkei 225 is the best performer in the region, gaining 0.7%. Taiwan’s Weighted Index rises 0.5%, while the Straits Times index in Singapore surges 0.6%.

Bucking the trend, Mainland Chinese stock Shanghai Composite drops 0.35%, while Hong Kong’s Hang Seng falls 0.5%. Seoul's Kospi also slipped 0.13%.

In the overnight trade on Monday, two of three major US index closed higher as investors shift focus to the US Federal Reserve meeting due later for clues on monetary policy stance. The Dow Jones fell 0.25% to 34,393.75, while the S&P 500 gained 0.18%, to 4,255.15, closing at a record high. The NASDAQ Composite added 0.74% to settle at a record high of 14,714.14.


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