The S&P/ASX 200 (ASX: XJO) and All Ordinaries (ASX: XAO) delivered another positive day on Thursday, both finishing 1.0% higher, spurred on by an improving global economic outlook.
Market sentiment is overcoming growing issues relating to the vaccine rollout and risk of mutations, with materials the biggest beneficiary jumping 1.8% behind BHP Group Ltd (ASX: BHP) and Rio Tinto Limited (ASX: RIO), both of which finished more than 2% higher.
The ASX 200 is now nearing an all-time high closer to 7,200 points, but it is clearly a stock picker’s market. The index finished at 6,998.8 points on Thursday to close out the day.
ASX 200 chart
A growing list of companies is now trading at record highs, including lithium and iron ore miner Mineral Resources Limited (ASX: MIN), plumbing supplies distributor Reece Ltd (ASX: REH), metal detector Codan Limited (ASX: CDA) and conglomerate Washington H Soul Pattinson and Co Ltd (ASX: SOL).
There are clear reasons for many of these companies to be reaching record highs, including commodity prices, but the valuation of many may seem excessive to traditional ‘value’ focused investors.
In other news, the Western Areas Ltd (ASX: WSA) share price soared 7% after giving a March quarter production update. A total of 4,236 tonnes of nickel was mined for the quarter, which was up 20% quarter-on-quarter, while the mined ore grade was 3.6%, up 27% quarter-on-quarter.
The Afterpay Ltd (ASX: APT) share price was also in the spotlight on Thursday as broker Morgan Stanley dropped its price target for the buy now, pay later leader from $159 to $149. A key reason for the more cautious outlook is the increased rising competition in the space, which could lead to lower margins for Afterpay over time. The new price target still represents a 24% premium to the current Afterpay share price of $120; Afterpay shares finished 2% higher for the day.
According to the latest ASX futures, the ASX 200 is expected to edge higher when the market opens on Friday. Shares to watch include CSL Limited (ASX: CSL) as the vaccination roll-out deviates from plans.
