ASX 200 enjoys best day in a month as the Santa Claus rally arrives

The Santa Claus rally finally arrived on Tuesday as markets had their strongest day in a month, despite no major economic announcements.

The benchmark ASX 200 index gained 64.50 points or 0.78 per cent to snap a five day losing streak finishing Tuesday’s session at 8314.00 points.

The broader All Ordinaries rose 64.60 points or 0.76 per cent to close the day out at 8558.60.

The Australian dollar continued its weakness, trading down at 63.5 US cents.

Australia’s market followed a strong trading session overnight out of Wall Street with the S & P 500 gaining 0.5 per cent, while the Nasdaq Composite closed at a fresh record high, up 1.24 per cent to finish the trading at 20,173.89 points.

IG Market analyst Tony Sycamore said the market will likely continue its positive momentum throughout the month.

“It appears the Santa Claus rally has officially kicked off for 2024, right on cue in mid-December. I will stick with the bullish Santa view, looking for further gains into the year-end, Mr Sycamore said.

The broad market rally saw 8 of the 11 sectors trading higher with healthcare, industrials, information technology, A-REITs, consumer discretionary and financials all gaining more than 1 per cent.

The only weakness on the market was the energy sector, which traded down 1.09 per cent, while utilities and materials fell slightly.

“The ASX200 defied the negative open implied by futures to deliver an overdue rally. The Index finished almost 1 per cent higher, with no discernible catalyst behind the move,” Mr Rodda said.

“There was a drop in yields with a bull steepening of the curve – that is, a bigger drop in front end rates than long end rates, which is typical of a market pricing in a marginally greater chance of interest rate cuts.”

In company news shares in Pexa Group jumped 8.20 per cent to $13.33 after it was announced Russell Cohen will be the company’s new CEO.

It was also a good day for West Gold Resources up 4.30 per cent due to an uptick in the underlying gold price.

Qantas shares rallied after the company reached a settlement of $120m over the scandal. Shares in Qantas were up 1.91 per cent to $9.07.

Meanwhile shares in Data#3 were the worst performing shares on the ASX, falling 9.83 per cent to $6.690 after announcing a new partnership with computer giant Microsoft.

Gas and Oil explorer Karoon Energy was also down over 9 per cent after announcing it was shutting down its Bauna Project, following an incident involving the mooring system. The company said two of the sixteen anchor chains failed.

A slight weakness in the iron ore price, which at the time of writing was trading at $US105.41, saw the major miners trade down.

Fortescue metals fell 0.37 per cent while BHP was down 0.27 per cent. Rio Tinto was the best of the three major miners although fell 0.11 per cent.