Despite a lacklustre first day of the new financial year, the S&P/All Ordinaries Index (Index: ^AORD) (ASX: XAO) could be headed to 6,000 by the end of this year.
In early trading the All Ords Index is up 1.1% at 5,425.8, and all it would take is a further 10% gain in the next six months to see the index breach the 6,000 mark.
Ten days like today would do very nicely, thanks very much!
In mid-morning trade, the giant miners, Rio Tinto Limited (ASX: RIO) and BHP Billiton Limited (ASX: BHP) are up 1.6% and 1.9% respectively, while the retailers Woolworths Limited (ASX: WOW) and Wesfarmers Ltd (ASX: WES), which owns Coles, Bunnings, Officeworks, Target, Kmart, service stations and liquor stores are lending their support. Woolies is up 1.7%, while Wesfarmers had gained 1.9%.
Of course the big four banks, Rio, BHP and the retailers would have to do much of the heavy lifting to get us to the 6,000 mark, given their dominance of the index.
The iron ore price expected to rise from its current level of US$92.20 a tonne in the second half of this year, which should add impetus for Rio and BHP to gain. Retailers on the other hand, would like to see rising consumer confidence, which has been hard hit since the Federal Budget, but has gradually been improving.
And the banks would like rising credit growth, stable unemployment and no shocks to the property/housing market, which could see all four hit new highs by the end of this year.
So far we have two out of three of the most important factors heading in the right direction (iron ore and consumer confidence), so it shouldn't take much to hit 6,000 around Christmas. Nothing is guaranteed of course, and a 'black swan' event could derail the goal at any time.
