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Australia, NZ: Shares rise at open
[BENGALURU] Australian shares kicked off the new quarter in positive fashion by rising 3 per cent on Wednesday, as investors hoped unprecedented stimulus unleashed by governments and central banks around the world would soften the coronavirus' devastating economic impact.
The S&P/ASX 200 index was up 2.2 per cent at 5,188 by 0122 GMT, after Tuesday's 2 per cent drop. The benchmark fell 24 per cent last quarter, its biggest since 1987.
Australia, like many other countries, has closed borders and initiated virtual lockdowns to control the spread of coronavirus that has infected more than 4,500 and killed 20.
The rate of growth in new infections has slowed to just under 10 per cent over the past three days, from 25 per cent to 30 per cent a week ago, raising hopes that Australia is starting to "flatten the curve".
The government is pumping A$320 billion (S$279.1 billion) into the economy through various stimulus measures, while the central bank has slashes interest rates to record lows, and gone down the road of quantitative easing for the first time ever.
Still, economists expect the country's A$2 trillion economy to slip into its first recession in almost three decades because of the pandemic.
"At one extreme are those who think the market represents good value right now, at the other those who see more pain and substantial falls to come," said Michael McCarthy, chief market strategist at CMC Markets.
"This vehement disagreement is producing the wild market swings as the balance between the two groups shifts."
Australia's beaten-down energy stocks drove the gains on Wednesday, rising as much as 9.3 per cent in their biggest intraday gain since October 2008.
Top gas producer Woodside Petroleum and Santos Ltd rose 8.4 per cent and 10.2 per cent after declining 35 per cent and 50 per cent, respectively, in March.
All the Big Four banks were in positive territory, with Commonwealth Bank of Australia up 1.8 per cent.
Mining stocks climbed as much as 2.9 per cent, recovering most of their losses from the previous session, helped in part by stronger iron ore prices.
Global miners BHP Group Ltd and Rio Tinto Ltd rose 2.9 per cent and 4.2 per cent, respectively.
Minutes released earlier showed the Reserve Bank of Australia was worried about the potential for a "very material contraction" in economic activity.
Gold stocks were the only losers, with a drop of about 0.7 per cent. Northern Star Resources slipped 3.1 per cent and Ramelius Resources was down 5.9 per cent.
New Zealand's benchmark S&P/NZX 50 index rose 1.1 per cent, or 104.47 points, to 9,901.22.
Air New Zealand gained 4.1 per cent, while Genesis Energy rose 6.2 per cent.