The Australian share market has eclipsed its pre-GFC all-time high, with the All Ordinaries index finally breaking through the record it set more than 11 years ago.
After six straight months of gains, the All Ords index rose 11.7 points, or 0.17 per cent, on Thursday to hit 6,874.1 points shortly after the market opened.
Although it immediately slipped back, the early surge beat the All Ordinaries’ previous intra-day high of 6,873.2 points, set on November 1, 2007.
Amid the tumult of the GFC, the All Ords lost 54 per cent in the next 16 months and bottomed out at 3,111.7 points on March 6, 2009.
AMP Capital economist Shane Oliver said there were several reasons why the recovery in Australia’s share market had lagged those in other countries.
“While US shares made it back to their 2007 high in 2013 and global shares did so in 2014, Australian shares took longer because of much tighter monetary policy after the GFC, the high Australian dollar until recent years, the collapse in commodity prices a few years ago and the fact that the 2007 high was a much higher high for Australian shares than it was for global shares thanks to the resources boom last decade,” Dr Oliver said.
Dr Oliver said the market’s 20 per cent jump in 2019 could mean it is “vulnerable to a short-term correction and the August earnings reporting season may result in some volatility”.
The All Ordinaries index – which is made up of the 500 largest companies on the Australian Securities Exchange – was set up in 1980 with a value of 500 points.
It recorded its highest ever close on Wednesday, finishing the trading day at 6,862.4 points.
The more narrow ASX200 index was introduced in 2000 with a value of 3,133.3 points.
The index of the largest 200 companies reached its intra-day peak on November 1, 2007, at 6,851.5 – a record that remained unsurpassed by midday on Thursday.