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Australia: Shares bounce back on bargain-hunting, stimulus hopes
[BENGALURU] Australian shares bounced back from 14-month lows on Tuesday and logged their biggest gain in more than three years, as investors went bargain-hunting and hopes for global stimulus eased worries about the economic fallout from the coronavirus outbreak.
The S&P/ASX 200 index settled 3.1 per cent higher at 5,939.60 after falling nearly 4 per cent earlier in the session. It dropped 7.3 per cent on Monday in its worst drop since the global financial crisis in 2008.
Henry Jennings, a senior analyst and portfolio manager at Marcustoday Financial Newsletter, said there was a little bit of bargain hunting and people were happy to breathe a sigh of relief after Monday's sharp selloff.
Boosting investor sentiment, Australian Prime Minister Scott Morrison said the government would soon announce measures to stimulate the economy, with a local report suggesting the package could be worth about A$10 billion (S$9.09 billion).
Overnight, US President Donald Trump said he would take "major" steps to counter the impact of the virus outbreak, prompting a 2.5 per cent rally in E-Mini futures for the S&P 500 after an early slide.
"It is imperative that policymakers hasten and collaborate to roll out coordinated measures that are emphatic, coherent and timely," said Vishnu Varathan, analyst at Mizuho Bank.
Meanwhile, oil prices rebounded 7 per cent after their biggest drop in nearly 30 years on Monday, supported by hopes for stimulus and potential US output cuts.
Index heavyweight financials were the top gainers, adding 4.7 per cent. The "Big Four" banks climbed in a range of 4.2 per cent to 6.1 per cent.
Top lender Commonwealth Bank of Australia rose 6.1 per cent after shedding more than 22 per cent in the previous 11 sessions.
Smaller peers Westpac Banking Corp and National Australia Bank advanced 5.2 per cent and 4.8 per cent, respectively.
The energy sub-index rose 3.4 per cent on recovering oil prices, regaining some lost ground after Monday's 20 per cent drop. Oil and gas explorers Cooper Energy and Beach Energy gained 12.2 per cent and 7.9 per cent respectively.
The mining sector added 4.3 per cent, with heavyweights BHP Group and Fortescue Metals Group rising 6.2 per cent and 6.8 per cent, respectively.
In New Zealand, the benchmark S&P/NZX 50 index fell 1.8 per cent to finish at 10,897.47, its lowest close since Nov. 19, 2019.
Utilities and healthcare firms were the biggest drags, with electricity generator Meridian Energy losing 2.1 per cent, and Fisher & Paykel Healthcare Corp shedding 4.5 per cent.