Australia: Shares finish week on a high note as US lays out recovery plan

[BENGALURU] Australian shares settled higher on Friday as investor sentiment was lifted by US President Donald Trump's plans to revive the world's biggest economy almost a month after the coronavirus pandemic shut it down.

Broad-based gains pushed the S&P/ASX 200 index up 1.3 per cent or 71.2 points to close at 5,487.50. The index clocked its fourth straight weekly gain.

However, the benchmark stock index pulled back from session highs after data showed that Australia's top trade partner China suffered its first economic contraction on record in the first quarter, which was slightly larger than forecasts.

Overall, hopes that the US will restart businesses soon to lead the global economic recovery and reports about Gilead's drug working as a potential treatment for Covid-19 boosted risk appetite.

"The danger is in opening everything too early and seeing a second wave, but the Gilead drug helps sentiment and life is starting to return to a new normal slightly," said Henry Jennings, senior analyst at Marcustoday Financial Newsletter.

"Here in Australia we seemed to have a dodged a bullet but we can't be complacent," he added. The country's daily growth rate of new infections has steadied but the prime minister has said virus-related curbs may remain in force for another year.

Meanwhile, New Zealand also warned of the risk of lifting social restrictions too soon, even as the number of coronavirus cases in the country showed a marked decline.

Health stocks gained most, settling 1.3 per cent higher as heavyweight CSL tacked on 1.1 per cent while hospital operator Ramsay Health Care added 4.9 per cent.

The energy sub-index finished 1.3 per cent up, as oil prices reacted positively to plans of reviving the US economy.

Largest natural gas producer Woodside Petroleum moved up 0.8 per cent while Oil Search gained 4.2 per cent.

Amongst miners, Rio Tinto Ltd jumped 3.3 per cent after the world's largest iron ore miner reported higher first-quarter shipments and said demand in China showed signs of a recovery.

Across the Tasman sea, New Zealand's benchmark S&P/NZX 50 index gained 2.9 per cent or 305.53 points to finish the session at 10,778.72. The index clocked its biggest weekly gain on record.

Local shares of lender Westpac Banking Corp firmed 1 per cent while dairy producer a2 Milk Co Ltd rose 1.6 per cent to touch a record high.

REUTERS