Australian share prices are on a roll after the shock election victory earlier this month of the ruling Liberal-Nation coalition.
The centre-right government returned to power in Canberra despite consistent opinion poll leads for the opposition Labor Party.
The ASX 200 index, comprising the shares of the 200 largest companies listed on the Australian Stock Exchange, surged in the wake of incumbent Prime Minister Scott Morrison’s 18 May victory.
Climate change problematic for Australia
Financial services put in an especially strong showing, given the possible threat of unhelpful Labor policies that could impact their profits had been removed.
More generally, the coalition is expected to take a more pro-business line than would have been the case had Labor taken office.
On the other hand, it is a large metropolitan and suburban society with a well-educated population that has long taken a keen interest in environmental issues.
After its hottest year ever, it was thought Australia would swing to the “green” policies of the Labor Party. But in the end, the country stayed with a coalition that, while insisting it is committed to action on climate change, said also that coal remained a valid energy source.
The ASX 200 was down 0.69% today at 6,440, but has been on a generally upward trend. On 30 April, it stood at 6,325.5 and, six months ago, on 30 November, it traded at 5,667.20.
A year ago, the index stood at 5,984.70 on 30 May 2018.
The ASX 200 contains some of the best-known names in Australian business environment. These include major financial services companies, such as ANZ Banking Group, Commonwealth Bank, National Australia Bank and Insurance Australia.
“Economic growth picked up”
Flag carrier Qantas Airways is quoted, as are resources giants BHP Group, Rio Tinto, Newcrest Mining and Pilbara. Shares are listed also in News Corporation, a company long associated with perhaps the best-known Australian born tycoon, Rupert Murdoch.
The election result is being classed alongside the British Conservative Party’s surprise victories in 1970, 1992 and 2015, three occasions when, again, the opinion polls were proved wrong. Another obvious comparison is with Donald Trump, whose triumph in the 2016 presidential election was foreseen by few people.
One explanation may be general contentment with Australia’s economic performance. In February, in its most recent Article IV health check, the International Monetary Fund (IMF) noted: “Australia has advanced further in its economic rebalancing after the end of the mining investment boom of the 2000s. Economic growth picked up to rates above that of potential output in the first half of 2018, with solid private and public consumption and residential investment more than offsetting the drag from delays in public investment plans and drought.”
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