The ASX200 is continuing its recent strong run in afternoon trade, and is on track for its fifth straight session of gains.
A short time ago, the index was up another 0.78% and threatening to break through 5,900 for the first time since early May.
October has been a big month so far, with the ASX200 posting highs on close in seven of the last eight sessions. That’s led to a gain of more than 4% since October 4.
According to Greg McKenna from AxiTrader, the positive global growth backdrop has provided the impetus for Australian stocks to finally break out of their recent trading range.
“There has been a convergence of both solid Australian data and a continuation of the growing evidence that the global economy is growing in a synchronised fashion for the first time in ages,” McKenna said.
Those sentiments were echoed by Chris Weston, chief strategist at IG Markets, who said the recent rally is due in large part a broad global appetite for equities.
“I wouldn’t say the local market is playing catch-up,” Weston said, citing the under-performance of Australian stocks this year to other developed markets such as the US.
“This is part of a global equity thematic which has spilled over into Australian stocks.” Looking regionally, Weston noted that Hong Kong’s Hang Seng index is up around 30% this year while Japan’s Nikkei is almost 12% higher.
On the local index, all of the major sectors are higher in afternoon trade, with the two biggest sectors — banks and mining — both up by around 1%. Commonwealth Bank is leading the majors, up more than 1% in afternoon trade.
Among the big miners, BHP and Rio are both up more than 1% after posting gains in excess of 2% yesterday, as iron ore prices steadied overnight and copper prices rose to their highest level since July 2014.
Gains extended to consumer discretionary stocks, with JB Hi-Fi up more than 1% and Myer gaining 0.56%. Harvey Norman reversed the trend with a 0.73% fall.
Among the big individual movers, telecommunications provider Vocus Group is more than 6% higher in afternoon trade.