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Australia, New Zealand: Shares hit record high on China stimulus hopes

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Australian shares scaled a record high on Thursday, tracking Wall Street, as expectations of more stimulus from China amid the coronavirus outbreak and a big drop in confirmed new cases boosted risk sentiment.

[BENGALURU] Australian shares scaled a record high on Thursday, tracking Wall Street, as expectations of more stimulus from China amid the coronavirus outbreak and a big drop in confirmed new cases boosted risk sentiment.

The S&P/ASX 200 index was up 0.4 per cent at 7,175.70, as of 0010 GMT, just two points lower than the record peak of 7,177.4 hit in early trade.

China, Australia's largest trading partner, is expected to cut its benchmark lending rate on Thursday, according to a survey of traders and analysts, after the central bank lowered the interest rate on medium-term loans earlier this week.

Provided the stimulus is effective and things get back on track quickly, the recent losses would seem to be a short-term blip and the markets are happy to look beyond the daily virus news, said Henry Jennings, senior analyst at Marcustoday Financial Newsletter.

Aiding sentiment further were reports that new cases in China's Hubei province - the epicentre of the outbreak - dropped to 349 on Wednesday from 1,693 cases a day earlier, although it was accompanied by a change in methodology. The total number of cases in China so far has crossed 74,000, and has resulted in over 2,100 deaths.

The mining sub-index rose up to 0.8 per cent, marking its third straight session of gains, lifted by Fortescue Metals Group and Iluka Resources, which gained 1.4 per cent and 12.2 per cent, respectively.

Retail conglomerate Wesfarmers extended gains, adding up to 1.7 per cent, while Coca-Cola Amatil advanced as much as 4.7 per cent on upbeat earnings.

Australia and New Zealand Banking Group rose up to 0.5 per cent, marking its third consecutive session of gains, after the lender posted its first quarterly growth in home loan volumes in domestic market since mid-2018.

The energy sub-index added 1.2 per cent, with the country's largest electricity and gas retailer Origin Energy rising 5.1 per cent, after its flagship APLNG project reported record output in the first half.

Qantas Airways gained 8.4 per cent, marking its best day since May 2018 as the carrier unveiled a share buyback of up to A$150 million (S$140 million) and declared a higher interim dividend of 13.5 Australian cents per share.

Over in New Zealand, the benchmark S&P/NZX 50 index surpassed the 12,000 level for the first time and was trading 0.4 per cent higher at 12,029.4.

Heavyweights Auckland International Airport gained up to 2.5 per cent, its best session in nearly two weeks, and NZ-listed shares of Australia and New Zealand Banking Group rose 0.8 per cent.

REUTERS