Time for a midday recap: local shares are trading slightly higher, propped up by gains in industrials and energy stocks and as investors shrug off an underwhelming press conference by US President-elect Donald Trump, which has moved currencies more than stocks.
Miners, which led an early stronger rise in the ASX, have lost some steam, but are still mostly higher, led by a 1.3 per cent rise in BHP.
Qantas is one of the biggest gainers among the top 200, rising more than 3 per cent after the greenback tumbled overnight, reducing the airline’s fuel costs. The Aussie is holding onto its gains, trading around $US75.5¢.
Energy shares are being boosted by higher oil prices, with Santos up 1.1 per cent and Woodside 0.9 per cent higher.
Gold stocks remain on the ascent, with the All Ords gold index hitting an eight-week high as the precious metal’s prices races to $US1200 an ounce, buoyed by softness in the greenback.
Among the weaker performers is Wesfarmers, down 0.7 per cent, while AGL Energy has fallen 0.5 per cent and utilities owner APA Group is down 0.7 per cent.
“For now, the trend remains positive. But we have had such a strong run, it wouldn’t be surprising if there was a pullback round the corner,” Rivkin Securities’ local investment analyst William O’Loughlin said.
Trump initially sent stocks lower during the press conference as he slammed the pharmaceutical industry for high drug prices, but Wall Street quickly recovered to end slightly higher.
Locally, CSL and Mayne Pharma, both exporters into the US, are among the day’s losers, falling as much as 1.6 per cent and 3.4 per cent respectively.
But the overall investor reaction was a “perfect example of the current, perhaps over-exuberant momentum in the market”, said Chris Conway, Head of Research at Australian Stock Report.
The fact that Trump remained short on detail around mooted key economic policies such as tax reform and infrastructure spending didn’t bother share investors too much, said Conway.
“If Trump failing to address some issues most people believe he won’t be able to deliver on anyway is the worst of it, then we are absolutely in a vacuum of bad news which markets can continue to rally into.”
Given the recent strong moves in the local share market, Conway has also upgraded his already bullish outlook, predicting the ASX will soon hit 6000.
“I think the market can trade to this level in the next few weeks and then the prospect of such a key level, the index being a touch overbought, and the spectre of reporting season will see – at the very least – some sideways consolidation or a pullback,” he said.