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The ASX 200 surged another +0.9% on Wednesday, taking the index well above 9200 for the first time; so much for Liberation Day tariffs, sticky inflation, falling house prices, and the US-Iran War. Gains were broad-based, with more than 75% of the main board advancing as the local market finally punched to new highs; it’s only taken 110 trading sessions! A rampant resources market offset weakness in the banks, with BHP on its own contributing 40% of the day’s 82-point advance. We don’t want to jinx the local index, but after advancing +5.6% from its intra-day low 9-trading days ago, as we said at the end of July: “We wouldn’t be short for quids.”
- We remain bullish towards the ASX and still believe surprises will be on the upside, especially following many retail investors “abandoning ship” in recent weeks.
Selling was fairly aggressive in the banks yesterday morning, and even after a decent bounce, the “Big Four” ended down an average of 0.8%; if they had held firm, we’d already be trading above 9250. The influential banks softened after a strong session on Tuesday, with some rotation likely unfolding into the miners as the news improved around the US-Iran conflict. With home loan growth/activity a real issue for the banks as the Australian housing market grinds to a halt, we imagine Commonwealth Bank (CBA) will be cautious in their outlook when they report their FY26 results next Wednesday, hence a few weak longs probably adopted an “if in doubt, get out approach.
Overseas markets were mixed on both sides of the Atlantic overnight. In Europe, the German DAX slipped 0.3% while the UK FTSE eked out a +0.1% gain. In the US, the tech-based NASDAQ gave back some of the previous session’s stellar gains, slipping by 0.8% while the Dow closed +0.5% higher.
- The SPI futures are calling the ASX200 to open marginally lower this morning (-9pts) following the mixed session on overseas bourses offset by further strength in global miners.
MM remains bullish towards the ASX200 around 9225
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