Local shares gain again but don’t crack all-time high

Derek Rose | January 30, 2024

The local share market has come achingly close to hitting a new all-time high for the second time this month only to once again shy away from a record. 

The S&P/ASX200 index late on Tuesday morning climbed as high as 7,630.5 – less than three points from breaking its all-time intraday record of 7,632.8, set 13 August 2021.

But the benchmark index faded throughout the afternoon, giving back more than half its gains to finish up just 21.8 points, or 0.29 per cent, to 7,600.2.

The broader All Ordinaries finished up 26.7 points, or 0.34 per cent, to 7,835.0.

The ASX200 also came within a whisper of setting a new record high on January 2 – only to go into a tailspin the next day and pulling back 2.3 per cent over the next four days.

Capital.com analyst Kyle Rodda wrote that the market could said to be range-bound until a new high was made and that Wednesday’s fourth-quarter domestic inflation data could be the catalyst for the next directional move in the market. 

While the Reserve Bank is clearly done hiking rates, a weaker-than-expected inflation readout could bring forward expectations of quicker rate cuts, particularly following Tuesday’s dismal retail sales data, according to eToro market analyst Josh Gilbert.

The Australian Bureau of Statistics reported on Wednesday that retail turnover plunged 2.7 per cent in December, as Black Friday sales pushed a good deal of discretionary spending into November. Consensus expectations had been for a 1.7 per cent drop.   

“The underlying trend in consumer spending remains weak, in particular for discretionary items,” said Sean Langcake, head of macroeconomic forecasting for Oxford Economics Australia.

Seven of the ASX’s 11 sectors finished higher on Tuesday and four closed lower.

Tech was the biggest mover, climbing 1.9 per cent as Megaport soared 27.6 per cent to a 20-month high of $12.48 on a quarterly update.

The Brisbane-based IT services company said it made $48.6 million in revenue for the December quarter, up five per cent from the three months prior, as it added new 39 customers and launched new partnerships.

In the heavyweight mining sector, Nickel Industries also shone, rocketing 20.8 per cent to a two-month high of 72.5c after announcing it was hiking its dividend after record quarterly earnings of $US135.4 million ($204 million).

Elsewhere in the sector, Fortescue climbed 1.5 per cent to $29.70, BHP added 0.4 per cent to $47.05 and Rio Tinto advanced 0.5 per cent to $132.46.

The Big Four banks were mixed, with Westpac dropping 0.5 per cent to $23.8 and ANZ dipping 0.2 per cent to $26.79. NAB was flat at $32.13 and CBA added 0.1 per cent to $116.05.

Insurance companies – whose bottom lines tend to be adversely affected by lower interest rates – had a down day, with IAG dropping 1.3 per cent, Suncorp falling 2.0 per cent and QBE retreating 2.2 per cent.

Elsewhere, City Chic Collective soared 26.4 per cent to 55c after the plus-sized woman’s apparel retailer confirmed a report in the Australian Financial Review it had been approached by several interested parties about a sale of its North American business. 

The Australian dollar was buying 66.16 US cents, from 65.90 US cents at Monday’s ASX close.

 ON THE ASX:

* The benchmark S&P/ASX200 index finished Tuesday up 21.8 points, or 0.29 per cent, to 7,600.2.

* The broader All Ordinaries gained 26.7 points, or 0.34 per cent, to 7,835..

CURRENCY SNAPSHOT:

One Australian dollar buys:

* 66.15 US cents, from 65.90 US cents at Monday’s ASX close

* 97.46 Japanese yen, from 97.59 yen

* 61.15 Euro cents, from 60.79 Euro cents

* 52.08 British pence, from 51.88 pence

* 107.75 NZ cents, from 108.12 NZ cents.