With the latest inflation numbers coming in lower than expected (0.8% vs 1.0%), the market appears to have regained its upward momentum, climbing 54.90 points or 0.74% to 7,456.90 and setting a new 100-day high.
The sectors told the story today, with only Energy (-0.44%) and Materials (-1.07%) missing out on more than 0.8% growth across the board. Real Estate took the crown with a 3.41% bump, perhaps boosted by hopes of another rate rise pause in August.
Commodities went the other way – gas, silver, platinum and base metals were all marginally (less than 0.65%) down, while palladium took a -2.18% hit and nickel lost 3.82%.
Zinc and gold bucked the trend, gaining 0.71% and 0.53%, respectively.
The best performers on the ASX today were IT service management company Megaport Limited (+13.85%) – which gained on strong quarterly performance – and immuno-oncology biotech Imugene Ltd (ASX:IMU, OTC:IUGNF) (+15.17%).
Investor sentiment begins to strengthen
The latest Global Investor Confidence Index by State Street (NYSE:STT) is pointing to a reversal of bearish attitudes in the global economy, although sentiment has still not returned to neutral just yet.
The global index increased 0.8 points to 96.2 in July, led by a 1.3-point rise in the North American Investor Confidence Index (ICI) to 90.8 and a 0.7-point rise in the Asian ICI to 97.3, which countered a 5.4-point drop in the European ICI, which now sits at 99.5.
This index is designed to represent changes in risk appetite among investors; the greater the percentage allocation to equities, the higher risk appetite or confidence.
A 100-point index indicates neutral sentiment, a level at which investors are neither increasing nor decreasing their long-term allocations to risky assets.
The index is based on actual trades as opposed to opinions or surveys of institutional investors.
“Investor confidence continued to recover towards neutral, as the Global ICI improved to its highest level since last fall,” State Street Global Markets senior global macro strategist Marvin Loh said.
“However, overall investor tone remained defensive, with all our global and regional indicators registering a sub-100 reading.
“North America saw the greatest improvement with respect to investor sentiment, rising to its highest level in nine months as recessionary risk faded while inflation surprised to the downside.
“In contrast, the Europe ICI fell back below 100, with deteriorating data spreading across the region’s largest economies.
“Finally, the Asia ICI was largely unchanged as weak Chinese data prompted the government to engage in more aggressive stimulus efforts.”
Five at five
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