The Australian share market has done it again. It has been on the run lately and has managed to break all records in recent days. They have broken the record three times, and the chances of success are expected to keep climbing higher as there is no looking back for them.
When there was an outbreak of the Covid-19 pandemic, everybody knew that the global share markets were getting jabbed. It had become evident that economies would be facing a terrible recession. That is when Australia declared recession in September, and things looked terrible. This has ended their 28 years record of continuous economic growth.
What went wrong?
The Australian stock market and Wall Street in the USA have always been a big interest of investors. They are in a great direction, and interested investors keep an eye on it when all the people worldwide are asleep. Investors went on piling up stocks as they had nowhere else to go for a decent amount of returns as the cost of the property was high. Also, because of the low-interest rate in banks, keeping their money in the bank was not an option.
The Australian stock market had retreated to its last level that was seen in February 2020, by January. Again, the pandemic came as a blockage and caused a widespread shutdown. The Australian Stock market kept hitting the records of all time last Friday and once again on Wednesday and Thursday continuously as the government’s response was exhausted. There was continued good news of a faster-than-expected economic recovery.
What are the reasons for the growth?
The tech sector’s growth had been at its peak last year, and Australia’s Afterpay was the favorite of the young generation who avoided expensive credit cards. The work from home tech stocks was booming for apparent reasons. Consumer discretionary inventories were robust as shoppers were not able to travel abroad. They had to spend their time at home improving it with the support of Jobkeeper and jobseeker payments.
Australia’s flagship resource sector has also returned as a river as global stimulus measures have their motives set at driving the economy from the economic downturn recently. This is helping in boosting the economic demand. Also, earnings have been great in recent months in Australia in terms of bank stocks.
What will ASX do next?
It is hard to predict anything yet, but there are chances that the current 7000 to 8000 point mark could come up next. This week’s GDP figures have proven that the Australian economy has recovered and has stood back again after the pre-coronavirus infection highs. This is the fastest recovery of recessions in the last 45 years. However, the virus is still a significant uncertainty.
Another strange thing is whether China will continue the bitter share trade with Australia and whether it will ease out the bitterness or not. However, ASX is on a roll, and there is no looking back for them right now.