The S&P/ASX200 benchmark index finished Wednesday close to the highs of the day, up 106.5 points, or 1.83 percent, at 5941.6 points, while the All Ordinaries index gained 104.8 points, or 1.76 percent, at 6064.9.
“What an incredible performance, it’s just phenomenal,” said CMC Markets chief market strategist Michael McCarthy.
“I can’t reconcile this with the information from companies and the macro performance we’re seeing, but the market is always right.”
The gains were being driven by retail investors, McCarthy said.
“Institutional and professional investors were caught out by the rally and some of them have been forced to scramble,” he said.
With the price action this strong, further gains were likely in the next several days, McCarthy said.
The ASX200 is now up 35 percent from its March 23 nadir of 4402.5, and down just 17.4 percent from its all-time peak of 7197.2 set on February 20.
Every sector was up except health care, which edged 0.07 percent lower as CSL declined 0.4 percent to $283.55.
McCarthy said the sector’s lack of support pointed to the idea that investors are looking for beaten-up stocks and sectors.
Goldminers also suffered during the strong risk-on session, with the five worst-performing ASX200 components all extractors of the precious yellow metal.
Silver Lake, Regis, Gold Road Resources, Saracen and Evolution dropped by between 8.4 percent and 5.8 percent, while Northern Star fell 5.5 percent and Newcrest dipped by 2.3 percent.
Diversified miners performed better, with South32 gaining 6.9 percent to $2.16, Rio Tinto adding 0.5 percent to $97.42 and BHP advancing 2.6 percent to $36.34.
Zip Co soared another 22.1 percent to an all-time high of $6.35, on top of Tuesday’s 38.7 percent gains following the buy now, pay later company’s acquisition of US-based QuadPay.
“That is just eye-watering,” McCarthy said, noting the gains gave Zip a market capitalisation of $2.5 billion.
Rival Afterpay added 5.5 percent to an all-time high of $52.26—up more than six-fold from its March 23 nadir of $8.01—while others in the buy now, pay later space also shone.
Flexigroup added 6.0 percent, Sezzle rose 7.3 percent, Splitit gained 4.7 percent and Openpay soared 51.8 percent to an all-time high of $3.02—up nine-fold from its March 23 low of 32 cents.
“I’m going to call this a bubble,” McCarthy said. “That is bubble behaviour.”
Elsewhere, the banks all had a strong day, with Commonwealth up 3.3 percent to $66.11, ANZ up 5.0 percent to $18.92, NAB gaining 4.6 percent to $18.70, and Westpac adding 4.4 percent to $17.95.
Shares in energy provider Infigen have surged by 36.4 percent to 80.5 cents after a $777 million takeover bid from Australian investment group UAC Energy Holdings.
UAC, majority-owned by AC Energy Group, is offering 80 cents per Infigen stapled security.
Telecommunications provider Amaysim had its shares spring by 16.7 percent to 42 cents after declaring it would buy OVO Mobile.
Amaysim, Australia’s fourth-largest mobile provider, paid $15.8 million for the company and its 77,000 customers.
Seven West Media gained three cents, or 28.6 percent, to 13.5 cents.
SWM shares are up 57 percent this week and in response to a query from the ASX, the media company said it had no explanation for the rise.
Auckland Airport gained 4.9 percent to $6.40, Sydney Airport advanced 3.6 percent to $6.12, and toll road operator Transurban rose 2.3 percent to $14.95 in a good day for industrial stocks.
Meanwhile the Australian dollar hit a five-month high of 69.84 U.S. cents after the Australian Bureau of Statistics announced the country’s economy contracted just 0.3 percent in the March quarter despite the lockdowns and the bushfires.
Later it pulled back from that level and at 1718 AEDT, one Australian dollar was buying 69.37 US cents, up from 68.02 US cents at the close of trade on Tuesday.
ON THE ASX:
* The benchmark S&P/ASX200 index closed Wednesday up 106.5 points, or 1.83 percent, at 5,941.6 points
* The All Ordinaries also closed up 104.8 points, or 1.76 percent, at 6,064.9 points
* At 1723 AEST, the SPI200 futures index was down 17 points, or 0.29 percent, at 5,909 points
One Australian dollar buys:
* 69.37 US cents, from 68.02 US cents on Tuesday
* 73.38 Japanese yen, from 73.31 yen
* 61.79 euro cents, from 61.13 cents
* 55.04 British pence, from 54.29 pence
* 108.11 NZ cents, from 108.44 cents
By Derek Rose