The S&P/ASX 200 Index (ASX: XJO) closed 1.06% higher at 7,386.40 points on Thursday – just 0.27% shy of an all-time high. The index's strong gains are supported by many big-name ASX 200 shares that are also sitting at or just below all-time highs of their own.
So, how can these Aussie valuations be so high even as more than half the country remains in lockdown thanks to the Delta strain of COVID-19?
These ASX 200 shares are nudging new highs
Let's look at some of the ASX 200 shares that are currently at or near all-time highs. Among the big names are Telstra Corporation Ltd (ASX: TLS), Wesfarmers Ltd (ASX: WES) and BHP Group Ltd (ASX: BHP). Those are some heavy hitters of the Aussie share market.
Strong gains across multiple sectors have helped propel the benchmark index higher in recent days. However, the real answer may not be at home but further abroad.
It's long been known that the Aussie share market tends to 'follow the leader' a little bit. That leader at the moment tends to be the US share market. Whenever the US markets, such as the Dow Jones Industrial Average Index (DJX: .DJI) or S&P 500 Index (SP: .INX) climb overnight, the Aussie market tends to follow.
A couple of strong days of trade on Wall Street have helped propel ASX 200 shares higher as investors follow the sentiment seen by investors overseas. There are, of course, exceptions. Shares like BHP are also benefitting from higher commodity prices that are expected to flow through to higher earnings.
There is also the ever-present factor of government stimulus at the moment. Governments around the world, including in Australia, pumped billions into the economy in the face of the COVID-19 crisis. That means that there is a lot of additional money in the economy that could either be spent (perhaps on ASX 200 companies' products) or invested in ASX 200 shares themselves.
Foolish takeaway
It may seem odd that ASX 200 shares are performing so well in the face of continued COVID-19 disruption. These are somewhat unusual times, and a combination of government stimulus and the forward-looking nature of markets appears to be propelling markets higher right now.
