The Australia’s share market, or the All Ordinaries Index (INDEXASX: XAO)(ASX: XAO) hit an all-time high today, finally passing the level that was set before the GFC over a decade ago.
The All Ordinaries finished at 6,862.40 points after rising by 0.73% during the day.
The businesses in the ASX have not exactly been firing on all cylinders. The last report of Telstra Corporation Ltd (ASX: TLS) showed a steep profit decline. The big banks like Commonwealth Bank of Australia (ASX: CBA) are facing a sluggish housing market and continuing Royal Commission problems.
However, resource companies are having a great time with the BHP Group Ltd (ASX: BHP) and Rio Tinto Limited (ASX: RIO) share prices doing a lot of heavy lifting.
Many technology shares are also hitting new highs like Appen Ltd (ASX: APX), Xero Limited (ASX: XRO) and Altium Limited (ASX: ALU). Defensive businesses are also doing very well like Woolworths Group Ltd (ASX: WOW) and Coles Group Limited (ASX: COL).
I’d say the biggest reason for the strength of the share market has been the lower interest rates. Investors have jumped into higher risk assets like shares to try to replace the yield they’ve lost. We have seen the real estate investment trust (REIT) perform strongly even though net rental income hasn’t been growing strongly.
ASX investors have also cheered some of the reports being delivered overseas which point to continuing strength of the global economy. The global economy is important for Australia because it exports a lot goods to the world, particularly to China.
I’d want to be quite selective in the shares that I buy at the moment. For example, I’d be happy to choose one of the reliable businesses in the free report below.
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Disclosure: Jaz owns shares of Altium at the time of writing, but this could change at any time.
