The Australian share market surged into record territory on Thursday, passing the 7000-point milestone for the first time ever.
The S&P/ASX200 was up 38.6 points, or 0.55 per cent, at 7033.4 at 10.15am on Thursday after briefly hitting 7041.4.
The gains surpassed Wednesday’s record on the Australian stock exchange of 6996.8 points.
The ASX record came as the US stock market experienced a lukewarm response to the sing of the long-awaited “phase one” trade agreement between United States and China.
Wall Street briefly hit record highs after the trade deal was signed by US President Donald Trump and China’s Vice-Premier Liu He on Wednesday morning (Australian time).
The major indices later pulled back as investors got over their initial excitement.
The S&P 500 and Nasdaq briefly fell into the negative territory in afternoon trade, but managed to recover by close of trading with gains of 0.2 and 0.1 per cent respectively. The Dow Jones index closed 0.3 per cent higher at 29,031 points.
At the centre of the preliminary trade deal is a pledge by China to buy an extra $US200 billion ($290 billion) worth of US farm products, and other goods and services, over two years.
Although the US agreed to roll back some of its punitive tariffs, the vast majority (on $US250 billion; $360 billion worth of Chinese goods) will remain until a more substantial “phase two” deal with Beijing later this year.
Super fund investment
While plenty of Australians do not own shares, most super funds invest members’ money in shares listed on the ASX.
The Association of Superannuation Funds of Australia (ASFA) CEO Martin Fahy said many Australians should be interested in the record.
“It’s good news for more people than we think,” he said.
“There are 28 million superannuation account holders who own Aussie-listed equities.
“The ASX going through the 7000 points mark means your super has had a good day.”
However, Mr Fahy cautioned that good super performance should be measured in decades, rather than days.
Australian men on average have $111,853 in superannuation with about $24,000 of that invested in Australian-listed shares, according to ASFA’s December statistics.
Australian women have an average $68,499 in superannuation, of which about $15,000 is invested in Australian-listed shares.
The ASX 200 started with a value of 3133.3 points when it was created in 2000.
The index is expressed in points, rather than dollars, because of complex calculations that provide a more consistent indicator of the overall market.