Why the ASX 200 rose 1.04% on Wednesday
‘Equity indices have mostly pushed higher, courtesy of a solid night’s trade in the US overnight.’
ASX 200 follows Wall Street higher on Wednesday
Optimistic trade on Wall Street overnight looks to have contributed to a generally bullish mood in Australian equity markets on Wednesday, 16 September, with the ASX 200 benchmark finishing out the session up 1.04% at the 5,956 point level.
Overall, it was a relatively calm session, with the benchmark progressively drifting higher throughout the day. Looking on what drove today’s market action, IG Market Analyst Kyle Rodda said:
‘Equity indices have mostly pushed higher, courtesy of a solid night’s trade in the US overnight, which saw market sentiment improve and the US tech sector provide further signs its recent correction is over.’
Mr Rodda finished by noting that:
‘The ASX200 has been the stellar performer for the day. At time of writing, its trading roughly 1 per cent higher, in a session that’s seen all bar the utilities sector climb, with the market map topped by a rally in local tech-shares.’
The Australian Dollar (AUD/USD) last traded at $0.7315.
Equities wrap: risers and fallers in focus
During Wednesday’s session, Seek, Nearmap and Eagers Automotive were among the best performing Australian equities; while Whitehaven Coal, New Hope and oOh!media were amongst the worst performing.
Seek’s share price action proved particularly dramatic, rising some 9.422% or $1.810 – to finish out the session at $21.020 per share.
This came after speculation emerged that Chinese tech giant Alibaba (BABA) was considering a significant investment in Seek’s majority owned, Chinese-based jobs site Zhaopin.
Seek responded to these rumours through a market release, confirming them in part, noting that:
'Zhaopin and its shareholders are holding discussions with a number of parties to assess whether the introduction of new investors could better support Zhaopin's long term growth aspirations. These discussions may or may not lead to changes with respect to Zhaopin.'
Today’s speculation, which arose from sources at The Information, noted that Alibaba could make an investment in the quantum of the hundreds of millions. For reference, Zhaopin was taken private in 2017 by SEEK, FountainVest, and Hillhouse. Seek currently holds 61.2% of Zhaopin’s outstanding shares.
Elsewhere, in August Bloomberg reported that Zhaopin was considering a private placement of up to $500 million.
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US futures at a glance
At the timeof writing, US futures markets traded flatly, with Nasdaq and Dow Jones futures the best performing.
Looking forward, all eyes will likely be on the Snowflake IPO this Wednesday – with the company’s shares set to commence trading during the upcoming session.
Discover our deep-dive, Snowflake IPO Preview: The $35 Billion Bull Thesis here.
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