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ASX surges to near four-month high as traders continue Christmas rally

The Christmas party continued for the Australian sharemarket on Wednesday as one of the strongest sessions in months lifted stocks back near the highs of early September.

The investors returned from the four-day Christmas weekend with seemingly unbridled faith that the global economy will continue to weather the Omicron storm, sending all sectors higher and taking the market above 7500 for the first time in nearly four months.

The big banks, lithium miners, and retail behemoths Woolworths and Wesfarmers were strong as the benchmark ASX 200 index gained 89.5 points, or 1.2 per cent, to close at 7509.8.

Camera IconLocal stocks shot out the gate even though the lead from Wall Street was tepid. NCA NewsWire / Damian Shaw Credit: News Corp Australia

It was a fifth straight gain for the local bourse – something that hasn’t happened since early October – and a continuation of a trend that has taken the market within 1.7 per cent of the dizzying highs set in August.

There has only been one session since the end of September that has been stronger, a 1.3 per cent lift on December 8.

The broader All Ordinaries also rose, gaining 95.6 points or 1.2 per cent to finish at 7840.3, while the Aussie dollar was buying 72.31 US cents, slightly down on Tuesday.

The post-Christmas limbo often heralds a period of light and unpredictable trade, but while Wednesday’s volumes were indeed soft, sentiment was rampantly positive.

Local stocks shot out the gate even though the lead from Wall Street was tepid.

Camera IconLocally, the major banks were on fire. NCA NewsWire / Gaye Gerard Credit: News Corp Australia

OANDA Asia-Pacific analyst Jeffrey Halley said Omicron ruminations had made for a mostly sideways session in New York, with the US dollar steady, oil near recent highs, and the momentum of equities dulled.

“Although Omicron cases in the US and Europe among others, continue to surge, it has yet to make its presence felt negatively in economic data,” Mr Halley said.

“Europe’s restrictions will have a tail impact but, for now, markets are overwhelmingly pricing in the latest variant as a milder incarnation despite its easier contractibility.

IG Markets analyst Kyle Rodda agreed that investor sentiment had been boosted by some hope about future economic conditions, although he issued a warning for people placing all their bets on the first post-Christmas session.

“With volumes in a holiday lull, one shouldn’t attempt to infer too much from the price action.”

Locally, the major banks were on fire.

Camera IconChalice Mining was the best performing stock of the day. NCA NewsWire / James Gourley Credit: News Corp Australia

Commonwealth Bank added 1.3 per cent to close at $101.90, Westpac jumped 1.2 per cent to close at $21.46, NAB gained 1.3 per cent to $29.25, and ANZ rose 1.5 per cent to $27.88. Macquarie Group was also solid, finishing 1.5 per cent higher at $207.21.

BHP was flat at $41.33 and Rio Tinto slipped 0.3 per cent to $98.80, although Fortescue Metals eked out a 0.2 per cent gain to $19.28.

Lithium miner Pilbara Minerals had another decent session, surging 7.1 per cent to a new high of $3.17 to continue a rally that has added more than 25 per cent to its value since December 21.

Fellow lithium player Allkem – the tie up between Galaxy and Orocobre – rose 5.5 per cent to $10.39, and Liontown Resources added 7.5 per cent to $1.655.

Chalice Mining was the best performing stock of the day, rising 7.8 per cent to $9.41.

Whitehaven Coal and New Hope Coal sold off after strong pre-Christmas trade.

There were new highs for healthcare firms Healius and Sonic Healthcare, while Imugene, Ramsay, Cochlear, Pro Medicus, and ResMed also rose. Blood giant CLS was narrowly in front with a 0.1 per cent gain to $293.06.

Woolworths rose 2.1 per cent o $38.51 and drinks spin-off Endeavour gained 2.2 per cent to $6.92. Supermarket rival Coles added 1.5 per cent to $17.95 and IGA owner Metcash leapt 1.6 per cent to $4.42, while retail conglomerate Wesfarmers rose 1.6 per cent to $59.94.

Buy now, pay later firm Afterpay was a notable drag at the top end of the market, down 1.8 per cent to $85.08 after a US tech sector slide.

Altium was strong, setting a new record high as it closed 2 per cent ahead at $44.70. Elsewhere in the local tech contingent, Appen gained 5.3 per cent to $11.32, Xero rose 2 per cent to $144.87 and Megaport was 2.1 per cent higher at $18.89.

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