Australia: Shares gain as RBA plays up recovery prospects

[SYDNEY] Australian shares closed higher on Tuesday after the country's central bank reiterated that the impact from the coronavirus crisis could be less damaging than initially feared, repeatedly stoking hopes of a speedy economic recovery.

The S&P/ASX 200 closed 0.3 per cent firmer at 5,835.10, though lingering worries over US-China relations kept a lid on gains.

The benchmark shot up more than 30 per cent since sinking to a more than seven-year low in March and is on a five-week winning run, with the country able to contain the outbreak and swiftly position itself for an economic rebound.

The Reserve Bank of Australia (RBA), which last week said the downturn due to the pandemic would likely be less severe than first thought, echoed those sentiments again on Tuesday as it left interest rates unchanged at a record low.

Analysts at Westpac and RBC Capital Markets acknowledged the upbeat tone of the statement, but added that the announcement was in line with market expectations.

A significant decline in new infections, earlier-than-expected easing of restrictions and signs that hours worked had stabilised in early May also helped lift investor sentiment.

New Zealand's S&P/NZX 50 bourse ended 1.4 per cent higher at 11,034.17.

REUTERS