UPDATE: The ASX closed up one per cent to reach a five-and-a-half year high and the Aussie dollar is tearing towards 94 cents.
The big winner for the day was David Jones closing up 72 cents, or 22.57 per cent, at $3.91 a share, following a takeover offer which valued the company at just over $2.1 billion.
The S&P/ASX 200 Index closed up 53.2 points to 5463.8, while the All Ordinaries Index rose one per cent to 5460.3.
The Aussie dollar was trading just below 93.8 US cents a short time ago.
It’s Australia Day in April and it is a sea of green across markets.
The ASX is closing in on its five-year high, the Aussie dollar has surged toward 94 cents.
Key to the local stock market move has been the news that David Jones is the subject of a bid from Woolworth’s of South Africa, valuing the company at a little more than $2.1 billion. This has driven the stock up close to 25% and dragged other retailers like Myer up close to 5%.
Elsewhere the miners have benefited from the falling US dollar overnight and the associated rise in commodity prices while the banks catch the updraft of a big spike in housing finance in February and the prospect that higher interest rates (thus more margin) can’t be too far around the corner.
At Midday the ASX sat at 5,466.2 up 55.6 for a gain of 1.03% just a smidgen below the five-year high set in February this year.
At the same time the Aussie dollar is closing in on the top of its current uptrend channel which comes in at 94 cents. Some technicans believe it is on track to eventually trade all the way back to the 0.9750 leve where RBA Governor Glenn Stevens first got aggressive about the need for the Aussie dollar to be lower and the fact that is was “overvalued”
While the ebullience on the ASX is good for our superannuation and the rise in the Aussie dollar will be good for some traders, coming the day after the IMF downgraded the outlook for Australian growth and just eight days after the RBA Governor warned the Aussie was now contributing less to growth, the Aussie dollar’s rally is problematic economically.
For the moment though it’s celebrations all round. At least until US markets come in and start trading tonight and the ABS releases the march employment data at 11.30 am tomorrow.
That number is going to be huge for Australian traders – we’ll have live coverage here tomorrow.