Australia’s $239b stock rally blasts past record high

Bloomberg

One of this year’s best-performing stock markets has just hit a fresh record.
Australia’s S&P/ASX 200 Index reached its highest level, having added about $239 billion in value this year as investors cheered a dovish central bank, a surprise federal election victory by the incumbent center-right government and skyrocketing iron ore prices.
The gauge rose 0.3 percent to close at 6,845.10, pushing past its previous high from November 2007. The benchmark also smashed its intra-day high in early trading.
Anticipation that the Federal Reserve will cut interest rates this week, renewed
US-China trade talks and “reasonable” US corporate earnings results added to momentum that’s been building in the benchmark over the last month, said Eleanor Creagh, a Sydney-based strategist at Saxo Capital Markets. “The ASX has really looked determined to breach and set fresh record highs,” she said.
The decision by central banks around the world to pull back on interest rate hikes sparked a global equities rally amid bets that accommodative policies could bolster earnings.
The Reserve Bank of Australia came out with back-to-back interest rate reductions in June and July, the first changes in policy since September 2016.
The coalition’s shock election win in May triggered a relief rally with the finance sector rising 12 percent as investors rejoiced that the
opposition Labor Party wouldn’t be able to curtail tax breaks for property and stock-market investors.
Healthcare stocks advanced as the outcome thwarted plans to cap the amount they can raise premiums. Skyrocketing iron ore prices also propelled the index higher.
Benchmark prices for the steelmaking ingredient hit their highest in over five years, boosting miners including Rio Tinto, BHP and Fortescue Metals Group.