ASX strikes record high as Metcash rallies

The Australian sharemarket reset its record close for the fourth time in just more than a week, as gains in health stocks propelled the index above the 8500 mark for the first time during the session.

The S&P/ASX 200 Index closed up 0.6 per cent, or 47.3 points, to 8495.2 on Tuesday, extending the gauge’s year-to-date gains to 11 per cent. The All Ordinaries also rose 0.6 per cent with analysts expecting a strong finish to the year.

Jessica Amir, a market strategist at online trading platform Moomoo, said the ASX typically outperforms Wall Street in December.

“When the options market suggests the US will rise 2.4 per cent to 4.2 per cent this month, then you’d think the Aussie market might follow suit,” she said. She added that around $US1 trillion ($1.6 trillion) in consumer spending was expected to be flushed through the global economy this holiday season boosting sentiment.

On the ASX, nine out of the 11 sectors finished higher on Tuesday with health as the top gainer. Utilities fell, dragged lower by AGL and Origin.

Metcash shares had their best day in three years after Citi upgraded the wholesaler to “buy” from “neutral” on expectations that earnings of the depressed hardware business would bounce back. The shares jumped 7.5 per cent to $3.43, the largest one-day gain since late 2021.

The big banks lifted with ANZ leading the charge, climbing 1.1 per cent to $31.71. Westpac rallied to an intraday seven-year peak of $34 before closing 1 per cent higher at $33.61. Commonwealth Bank, however, slipped 0.3 per cent, taking a breather from a run of record highs.

Fund managers’ stocks also had a good day thanks to the buoyant market. Magellan rallied 5.2 per cent to $11.27, Regal Partners gained 1 per cent to $3.97 and GQG Partners gained 3.5 per cent, the latter rebounding from the previous session’s 14 per cent sell-off.

Miners were mixed as iron ore prices steadied following Monday’s strong gains. BHP fell 0.2 per cent to $40.66, Rio Tinto also lost 0.2 per cent to $119.05, but Fortescue jumped 2.1 per cent to $19.43.

Stocks in focus

In corporate news, Collins Foods was the biggest laggard after the KFC and Taco Bell restaurant operator lowered its fiscal 2025 earnings guidance and dividend due to a challenging consumer environment with sticky inflation weighing on margins. The shares dropped 4.3 per cent at $8.25, the lowest in three months.

It was also a lacklustre session for Woolworths. The supermarket giant shed 0.4 per cent to $30.21 after two weeks of industrial action over pay cut $50 million in food sales as the retailer struggles to stock shelves.

Buy now, pay later player Zip shed 0.6 per cent to $3.41 on news co-founder Larry Diamond will step away to focus on philanthropic activities.

And, insurance broker Steadfast Group rallied 2.7 per cent to $6.03 after an internal ongoing review found no evidence of improper incentives or compliance manipulation.