Santa rally gathers steam as ASX nears record high

The Santa rally is continuing apace, with the Australian bourse closing at a fresh 10-month high after its eighth day of gains in nine sessions.

The benchmark S&P/ASX200 index on Wednesday finished up 48 points, or 0.65 per cent, to 7,537.9, its highest closing level since February 3. The broader All Ordinaries gained 48.1 points, or 0.62 per cent, to 7,764.0.

Much like the S&P500, the ASX200 appears to be in striking distance of setting a new all-time high by the end of the year, needing just to rise 95 points - or 1.3 per cent - in the remaining five sessions left in 2023 to eclipse its current record, set in mid-2021. analyst Kyle Rodda wrote that the "everything rally" was being driven by expectations of interest rate cuts next year lowering bond yields, delivering a broad-based boost to equity valuations.

Every sector was except tech closed higher, with telecommunications the biggest gainer, rising 1.1 per cent as Telstra added 1.8 per cent.

Wesfarmers, Seek, Super Retail Group, REA Group, Collins Foods, BlueScope Steel, JB Hi-Fi, Boral, Regis Healthcare, Cochlear and Rio Tinto were among the companies setting new 52-week highs on Wednesday.

Among the Big Four banks, Westpac rose 1.0 per cent to $22.88, CBA added 0.3 per cent to $110.97 and ANZ and NAB both rose 0.7 per cent, to $25.81 and $30.55, respectively.

In the heavyweight mining sector, BHP rose 0.4 per cent to $49.80, Rio Tinto edged 0.1 per cent higher at $134.37, while Fortescue took a break from its string of gains to close down 0.8 per cent to $27.88. 

Allkem dropped 1.7 per cent to $10.41 in the lithium miner's second-to-last day of trading on the ASX after shareholders approved its merger with US-based Livent.

The new company will be known as Arcadium Lithium and it will replace Allkem in the ASX200 on Friday.

It wasn't a good day for everyone. KMD Brands dropped 8.0 per cent to 69.5c, its lowest level since the start of the pandemic, after the Kathmandu, Rip Curl and Oboz boots owner issued a disappointing trading update.

From August through the end of November, group sales were down 12.5 per cent, reflecting ongoing weakness in consumer sentiment, KMD said. 

"Improvement in Kathmandu's sale performance remains our priority,"  said group chief executive and director Michael Daly, indicating that Black Friday sales had not gone well.

Also, Incitec Pivot dropped 0.4 per cent to $2.87 as interim chief executive Paul Victor told shareholders at the company's annual general meeting that the sale of its fertiliser division was progressing. 

The divestment will leave Incitec as a pure-play commercial explosives business, Dyno Nobel, where trading has been tracking according to expectations, Mr Victor said.

The Australian dollar meanwhile was near a fresh six-month high against its US counterpart, buying 67.66 US cents, from 67.17 US cents at Tuesday's ASX close.

Corpay APAC currency strategist Peter Dragicevich said that the Aussie was gaining after Tuesday's release of minutes from the Reserve Bank's December 5 board meeting that read on the hawkish side.

"The underlying tone supports our assumption that while the RBA may not hike rates again, it shouldn’t be completely discounted," Mr Dragicevich said.


* The benchmark S&P/ASX200 index finished Wednesday up 48.8 points, or 0.65 per cent, at 7,537.9.

* The broader All Ordinaries rose 48.1 points, or 0.62 per cent, to 7,764.0.


One Australian dollar buys:

* 67.66 US cents, from 67.17 US cents at Tuesday's ASX close

* 97.18 Japanese yen, from 96.41 Japanese yen

* 61.72 Euro cents, from 61.48 Euro cents

* 53.19 British pence, from 53.07 pence

* 107.78 NZ cents, from 107.86 NZ cents


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