- The ASX 200 has surpassed 7,000 points for the first time in its history on Thursday.
- It was helped overnight by the signing of a long-awaited 'phase one' trade agreement between the US and China, settling some of the two countries' smaller disputes.
- However a 'phase-two' deal, which would deal with some of the more structural trade issues, appears like it will take much longer to negotiate.
- Visit Business Insider Australia’s homepage for more stories.
It's gone and finally done it.
The Australian Securities Exchange (ASX) has cracked 7,000 points for the first time ever, setting a new record high.
Having hovered nearby for weeks, the ASX 200 had closed just 14 points shy of the psychological level on Wednesday, teasing investors. It took just minutes on Thursday morning for the index to smash through it on Thursday morning, moving more than 40 points higher just 20 minutes after the opening bell.
The companies which gained the most in early trade include Australia tech-darling and software developer Altium, medical company Cochlear, supermarkets Coles Group and Woolworths as well as Wesfarmers.
The breakthrough comes after the signing of a stage one US-China trade agreement overnight, following years of on-again-off-again negotiations between the worlds largest two economies.
With the trade war having shaved whole percentage points off of global growth, the stage one deal may have proved the shot in the arm the ASX required. The signing which dame after the closing bell on Wall Street, followed subdued US trading the Dow Jones gaining just 0.3%, the S&P 500 0.15% and the tech-heavy Nasdaq not moving at all.
Terse negotiations between China and the US have been characterised by Twitter spats and hot and cold negotiations. It has proved, despite a phase one agreement, that both sides still have some way to go in normalising trade relations.
Former Australian Prime Minister Kevin Rudd attended the event at the White House overnight but remains sceptical of the likelihood a phase two deal will ever see the light of day.
"I see it as one, a 12-month ceasefire in [the] trade war [which is] good for [the] global economy; two, some progress on intellectual property protection; three, [the] hard stuff [is] pushed into Phase Two which is still a long way off, if ever," he tweeted.
If Rudd is right, and the deal only kicks the can down the road for another 12 months, it might have achieved a brief reprieve for global markets this year; setting up another rollercoaster in 2021.