Market hits new record

The S&P/ASX 200 hit a new all-time high of 6656.4 points in trading this morning, with the big resources companies contributing the majority of the gains.

By 1pm the market has come back slightly to 6654.3, but remains up 1.3% on yesterday’s close of 6563.7.

The strong performance follows a surge on US markets overnight, caused by predictions by some market watchers that the worst of the sub-prime woes are now behind us.

The predictions cause a flowering of bullish sentiment that pushed the US Dow Jones industrial average finished 191.92 points higher at 14,087.55 after hitting an all-time high of 14,115.51.

The return to confidence in the US has taken some of the heat out of the Australian dollar, which yesterday pushed through the US89¢ barrier. At 1pm the dollar was trading at US88.95¢, down on yesterday’s US89.18¢ close.

Businesses in the manufacturing sector will be hoping the current market resurgence filters through into the real economy after the Australian Industry Group–PricewaterhouseCoopers Australian Performance of Manufacturing Index eased again in September.

Falling employment and stock levels, production and delivery pushed the index down 1.7 points to 50.7, just above the 50 point line that separates expansion from contraction.

“It was a very ordinary Australian PMI result for the month, made even more ordinary by the softness in new orders and exports,” says Ai Group chief executive Heather Ridout.