Australian stock market still the best performing in the world

By Dale Gillham. Published at Mar 12, 2021, in Market Wrap

Just over a year ago, the nation was plunged into uncertainty as COVID-19 started to take hold, forcing almost everyone into lockdown and bringing on a technical recession.

Prior to this, the Australian economy had broken records for the longest uninterrupted economic growth in the developed world.

As a nation, we banded together and the economy is now booming with GDP growth in both the September and December quarters. With only a few weeks left in the current quarter we are set to make it three in a row.

The ABS statistics show that household and online spending is up, while the housing market is booming. Given this, you may be asking why with all this good news is the stock market not rising strongly.

Historically, since the low on our market following the 1987 crash, the All-Ordinaries Index increased at a rate of 0.52 points per day up to the all-time high achieved in February 2020.

Looking at the move up from the COVID-19 low in March 2020, we can break this past year into two parts.

In the first 22 weeks since the low, the Australian market rose at a rate of 12.59 points per day and in the 25 weeks since that point to the recent high on 17 February, it rose 4.78 points per day.

To put this into perspective, the rise out of the March 2020 low was around 30 per cent faster than the rise up from the March 2009 low following the GFC.

Given this, the All-Ordinaries Index is still moving quite fast despite the fact it is showing signs of slowing down.

In fact, a statistic that may shock some, the Australian market together with South Africa continue to be the best performing stocks markets in the world and have been for over 100 years.

Based on this, you have to wonder why so many are choosing to invest in the US market.


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