Why the ASX 200 is at a 15-month high today

The S&P/ASX 200 Index (ASX: XJO) is pushing towards new all-time highs. Here’s what’s been going right for ASX 200 shares.
The post Why the ASX 200 is at a 15-month high today appeared first on The Motley Fool Australia. –

Investor with palm up and graphic illustration of asx small cap tech shares charts shooting from his hand

The S&P/ASX 200 Index (ASX: XJO) is having another top day today as the market opens. At the time of writing, the ASX’s flagship index is up 0.96% to 6,994.4 points. That’s a 15-month high for ASX 200 shares. It’s also tantalisingly close to the psychologically potent 7,000 points mark, which the ASX 200 crossed for the first time ever in January of last year. Of course, the coronavirus pandemic made short work of that high just a month or so later, and we haven’t seen the ASX 200 climb back above 7,000 points since. But on the index’s recent momentum, it might not be too far off.

It’s a decisive move upwards for the ASX 200. The index had, until last week, been stuck in a rut of sorts since late November. That’s when upward momentum for ASX 200 shares stalled after a strong October. In fact, since 25 November, the ASX 200 has bumped along in a band between 6,700 and 6,900 points. But we are well above that band today.

So, why is the ASX 200 now suddenly pushing higher after months of going sideways? There are a couple of factors at play.

Why the ASX 200 is pushing higher at last

The first is positive economic momentum here in Australia. By all accounts, the Australian economy is recovering nicely from the coronavirus-induced recession last year, the first recession Australia has seen in near-three decades. The Reserve Bank of Australia (RBA) has flagged that it will not raise interest rates until 2024, and will also allow inflation to run somewhat before they would consider trying to reign it in. This is all highly supportive economic policy.

The vaccine rollout is progressing despite a few witches and shortages. And we have just had confirmation of a trans-Tasman travel bubble with New Zealand that should result in a tourism boost for both countries after a year of effective travel bans.

All of this is conducive to higher ASX shares.

US markets lead the way

Secondly, what is happening in the United States is also probably helping ASX 200 shares. The rollout of coronavirus vaccines in the US is going very well. According to the US Centers for Disease Control and Prevention (CDC), 42.4% of adults over 18 have now received at least one shot of a vaccine at the time of writing. That’s obviously great news for the US economy. The US share markets are reflecting this optimism as well by hitting new all-time highs. Just this month, the flagship US S&P 500 Index (INDEXSP: .INX) crossed the 4,000 points threshold for the first time ever last week.

Further, the big spending plans of the new Biden administration are also supporting markets. President Biden is now trying to push a mammoth infrastructure spending bill through congress after the recent passage of the massive US$1.9 trillion American Rescue Plan last month. Markets appear to be cheering all of this on, which is probably spilling over to our own ASX. Remember, US markets hit their pre-COVID highs in August last year. The ASX 200 is still chasing its own high watermark.

But this could soon change if things keep going the ASX 200’s way. And based on today’s moves with ASX 200 shares at a 15-month high, that’s what investors are expecting.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

See The 5 Stocks

*Returns as of February 15th 2021

More reading

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Why the ASX 200 is at a 15-month high today appeared first on The Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!