• The Australian Stock Exchange (ASX) is set to close out its best month since March 1988.
• The ASX 200 is up around 10.5%, or more than 600 points, from where it started in November.
• With a number of vaccine candidates showing early promise, analysts are predicting the recovery will tip into next year.
• Visit Business Insider Australia’s homepage for more stories.

The last time the stock market looked this good, “Die Hard” was storming the box office and George Michael’s “Faith” was top of the pops.

The Australian Stock Exchange (ASX) fell around 0.4% in early trade on Monday, the final day of November, but is still on track to close out its best month in 32 years.

Pending any major surprises, it should see the ASX 200 finish around 10.5% – or more than 600 points – higher than it was four weeks ago. To find a better result you’d have to go back to March 1988.

The rally has followed by similar gains on Wall Street, with the S&P 500 and tech-heavy Nasdaq both up by almost identical margins, despite the number of COVID-19 cases still growing.

While pandemic fears scuttled global markets back in March, investors largely appear to have shaken those off heading into the end of the year, with the recovery even outstripping the 9.5% bounce back in April this year.

Buoyed by record low-interest rates around the world and a completed US election cycle, the early success of a variety of vaccine candidates have seen markets largely rally throughout the month.

“Developments around a potential vaccine represent a point of inflection on the road to recovery. [We’re] expecting sustained, multi-year global GDP growth across developed and emerging economies,” Paul Xiradis, chief investment officer at Ausbil said.

Looking ahead, Xiradis said he expects the recovery to largely continue from here on out.

“We maintain our outlook for a ‘u-shaped’ recovery profile for the global and Australian economies, further supported by recent developments in the path towards a vaccine for COVID-19. Of course, this assumes there is no material reversal in the containment of COVID-19, which would slow the recovery.”

On this front, Australia has perhaps more to celebrate than anywhere else, with all states bar Western Australia due to reopen by Christmas, and Victoria appearing to have ‘eliminated’ the virus after more than 30 days with no new cases.

The resurgent economic activity is helping create hundreds of thousands of new jobs, replacing some of those lost during the shutdown, while the country’s banks successfully slash the number of outstanding loan deferrals to less than a third.

There are, of course, challenges ahead. Government support is being withdrawn, unemployment is expected to rise higher still, with the global economy likely to feel the impacts of the coronavirus for some time to come.

Meanwhile, Australia’s relationship with its largest trading partner China is at one of its lowest points in recent history. On Friday, the Chinese Ministry of Commerce levelled enormous tariffs on Australian wine, the latest in a series of targeted attacks on Australian exports.

But despite those complications, investors for now are keeping the faith.

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