Al-anwar Newspaper English news in Australia
A red-hot tech rally and gains for the financial giants helped the Australian sharemarket to fresh nine-week highs on Wednesday, with investors seemingly intent on pushing through the current geopolitical mayhem.
Afterpay owner Block and payment rivals Zip Co each bounded ahead while tech names Xero, Wisetech Global, Appen, Altium, and EML Payments also banked solid gains as the local bourse climbed for a fifth time in six sessions.
The benchmark ASX 200 added another 36.8 points, or 0.5 per cent, to close near a session high 7377.9 amid a maelstrom of inflation risks, conflict in Eastern Europe, surging oil prices, a drop in bond prices, and a mixed outlook for the US economy.
However, traders did take some solace out of the fact that the US Fed seems to be positioning itself to “aggressively” act on surging prices.
The broader All Ordinaries rose 44.3 points, or 0.6 per cent, to close at 7665.0 while the Australian Dollar faded from near 75 US cents to 74.55 US cents at the local close.
Other Asian markets were also strong – namely Japan’s Nikkei – after St Louis Fed President Bullard noted the US Fed could not wait for geopolitical risks to be resolved before interest rates are lifted.
Rising bond yields are also reflecting a market that is expecting more aggressive rate hikes to be launched in order to temper inflation and protect economic growth.
“Growing expectations that the Fed will deliver a sharp response to the inflationary problem helped support a rally in equity markets,” ANZ’s economics team said in a note. “But it is a challenging time for fixed income markets as the combination of hawkish central banks, high commodity prices, ongoing supply chain issues and rising inflationary pressures are all putting strong upward pressure on bond yields.
“The lift in bond yields is effectively tightening monetary conditions.”
City Index market analyst Tony Sycamore said a strong performance among technology stocks was perhaps reflective of the impending dividend bonanza set to hit the pockets of investor bankers over the next week.
“BHP alone is due to pay out $10b in dividends next Monday,” Mr Sycamore said.
“If today’s performance of the IT sector is anything to go by, the divvy dollars look to be finding a home.”
Fintechs were particularly strong on Wednesday with Block finishing 7.5 per cent higher at $188.10, Zip Co up 7.5 per cent to $1.645, and Sezzle 5.7 per cent ahead at $1.485.
Accounting software firm Xero rose 4.2 per cent to $102.93, Wisetech Global added 2.1 per cent to $51.87, Appen was up 3.5 per cent to $7.07, Altium gained 3 per cent to $33.57, and EML Payments ended the day 5.7 per cent higher at $2.77.
