ASX 200 Market Outlook: Record Highs Set, SPI Futures to Follow?

Market Overview

The ASX 200 index achieved a new intraday record high, driven by strong earnings reports and broad market participation. The index closed slightly below its all-time high, with a focus on the 9,125 level as a potential target for further gains.

Market Performance

On the day of the record high, 140 stocks within the ASX 200 advanced, while 51 declined, and 9 remained unchanged. The trading volume was the highest since mid-December, indicating strong bullish sentiment. Key sectors contributing to this rally included:

• Financials: The financial sector reached a record high, with major banks like CBA, NAB, and ANZ showing significant gains.
• Energy: The energy sector also performed well, reaching its highest level since October 2024, influenced by rising crude oil prices amid geopolitical tensions.
• Communication Services: This sector had its best session since April, with Telstra Group hitting a record high.

Correlations and Technical Analysis

The ASX 200 shows a strong correlation with domestic cyclicals, particularly with the Materials sector (0.94) and Financials (0.74). This suggests that the performance of commodities and banks is crucial for maintaining upward momentum. In contrast, correlations with the S&P 500 and Nasdaq have turned negative.

Technically, the ASX 200 closed at 9,086.2, above the 9,000 level and the breakout point of 9,075. The immediate resistance is near 9,100, where balanced call and put open interest may lead to short-term consolidation. A sustained break above 9,125 could target 9,200, while a drop below 9,075 may revert the index towards 9,000.

SPI 200 Futures Analysis

The SPI 200 futures reflect a firm uptrend, despite some volatility. Support levels are identified at 8,968 and around the 8,900 mark, where the 10- and 20-day EMAs converge. While some consolidation is expected near record highs, the overall bias favors a breakout above 9,119, with 9,200 as the next target.