The sharemarket closed at its highest level in 20 months yesterday as consumer staples, consumer discretionary, financial, energy and healthcare sectors enjoying strong gains as investors were frustrated with a lack of significant dips in recent weeks.
Weaker than expected domestic jobs data pushed the Australian dollar down but had little effect on shares.
According to the Australian Bureau of Statistics, employment fell by 5000 jobs in December, below market expectations of a 5000 rise, while the jobless rate rose to 5.4 per cent, in line with market expectations. Full-time work fell 13,800, while part-time work increased by 8,300.
The benchmark S&P/ASX 200 closed up nearly 0.4 per cent at 4756.6 after rising as much as 1 per cent. Share-trading value soared to $5.2 billion versus last year's average of $4.1bn.
The index passed a recent high of 4750.7, prompting buying from investors who had been expecting a deeper pullback before the Australian earnings reporting season next month. "There's so much tension out there, built-up tension caused by a fear of missing out," Morgan Stanley Private Wealth investment adviser Shannon Briggs said.
Crown jumped 2.3 per cent after Credit Suisse upgraded the casino operator to "outperform".
Mineral sands producer Iluka rose 3.7 per cent after saying it would cut spending further this year and mothball one of its mines in Western Australia as the company acknowledged market conditions for its products, used in ceramics and paints, remained very challenging.
On the downside, Fortescue Metals slumped 4.2 per cent after the price of spot iron ore declined 4.9 per cent.
Mr Briggs said it was a fair bet the S&P/ASX 200's former resistance at 4750 would turn into technical support for the stockmarket and that the index would head towards major technical resistance at about 5000 in the next few months.
"When you get a run like we had late last year, followed by consolidation for a couple of weeks, followed by further move up, it's normally a positive sign," he said. The S&P/ASX 200 rose about 9 per cent in the seven weeks up to early January.
Others said that while such a move was possible, it would need to be backed up by domestic earnings reports next month.
"The market generally is pricing in a fairly good environment, so any disappointment is going to be dealt with rather savagely," Pengana Capital fund manager Tim Schroeders said.
Investors were awaiting China's GDP, industrial production, retail sales and fixed-assets investment data today.
The Australian dollar was weaker on the day after unemployment rose in December, which some experts say keeps the door open for a February interest-rate cut. At 5pm AEDT, it was trading at $US1.051, down US0.43c.
"The labour force data supports our view that the Reserve Bank will need to lower interest rates further this year to limit the rise in the unemployment rate."
