Perhaps Australia’s ASX 200 should be renamed the Jekyll and Hyde 200 index.
The index finished 1.94% higher on the back of, seemingly, nothing. The RBA monetary policy statement was a near carbon copy of that released in June. There has been no deal reached between Greece and its international creditors. Chinese stocks were pummeled again, while iron ore futures suggest the spot price may tumble below the $50 a tonne level this evening.
Despite this, the index continued to push higher over the course of Tuesday’s session. The gain was the largest one-day percentage increase seen since February 13, and the second-largest this year.
All sectors finished in the green, including materials and energy despite hefty losses in commodity markets on Monday.
While a remarkable gain, perhaps tonight’s emergency Eurogroup meeting, and steep losses on the index over the two previous two sessions, explains the huge increase. Market positioning.