It's a huge day for S&P/ASX 200 Index (ASX: XJO) investors on Monday as Australia's benchmark index leaps into uncharted territory.
The index of the top 200 Aussie stocks closed on Friday at 8,212.2 points, hitting an intraday high of 8,225.5 points.
That was enticingly close to the record intraday high of 8246.20 notched on 20 September. But it fell short.
Today, the ASX 200 has raced past that prior record to reset the bar at 8,271.4 points. That sees the benchmark index up more than 17.5% over the past 12 months.
And if we add in the dividends many of these top stocks pay out, the returns are even more impressive.
The S&P/ASX 200 Gross Total Return Index (ASX: XJT), which includes all cash dividends reinvested on the ex-dividend date, is now up 21.9% since this time last year.
Boom!
Helping lift the index today, Commonwealth Bank of Australia (ASX: CBA) shares are up 1.0%, while BHP Group Ltd (ASX: BHP) shares are up 2.0% at this same time.
Image source: Getty Images
What's sending the ASX 200 flying to new records?
Investor sentiment has taken a leg up in recent weeks with inflation in the United States coming under control and the US Fed cutting interest rates by 0.50%.
Hopes are now rising that the Reserve Bank of Australia will join the growing number of global central banks and cut rates Down Under at least once, and maybe twice, in 2024 yet.
Last week, ASX 200 mining stocks got a particularly big boost after the People's Bank of China (PBoC) announced it was lowering the reserve requirements for Chinese banks by 0.50% and reducing down payment requirements on existing mortgages by the same amount.
On Thursday, Chinese officials indicated that more rate cuts and fiscal stimulus measures were pending to boost economic growth to the government's 5% target and help support the nation's sluggish property market.
What are the experts saying?
The analysts at CBA believe the stimulus out of China that's helping boost the ASX 200 to new records will likely not be the last.
According to CBA economist Carol Kong (quoted by The Australian Financial Review), "We continue to expect the government will deliver more fiscal stimulus soon. The sense of urgency signalled at the joint press conference [last] week suggests a fiscal package may be in the works."
Tribeca Investment Partners lead portfolio manager Jun Bei Liu also sounded an optimistic note on China's stimulus measures and their likely impact on the ASX 200.
"If China is stimulating, that actually bodes really bullish for where we can go as a market," she said. "In Australia, we're very much linked to what's happening in China, it's good for our commodities, good for our terms of trade."
Liu added that the outlook for RBA interest rate cuts has improved as well.
According to Liu:
For our equity market, because of capital flows, it very much follows what happens in the US. Since the Fed already started with a 50 basis point cut, for us, it's also probably not too far away as well…
I'm pretty bullish … I think it bodes really well for the equity market to continue to run into the year-end.
In later morning trade, the ASX 200 has slipped off its intraday all-time high, but remains up 0.6% for the day at 8,262.4 points.
