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Australia: Shares hit 3-week high on hopes of virus vaccine, fresh stimulus


[BENGALURU] Australian shares ended at their highest level in three weeks on Thursday, led by financials and technology stocks, as positive developments in a Covid-19 vaccine trial and optimism about fresh stimulus raised hopes of a quicker economic recovery.

Rising for the third straight day, the S&P/ASX 200 index gained 1.7 per cent to 6,032.7, its highest closing level since June 11.

Investors cheered promising results of a Covid-19 vaccine developed by German biotech firm BioNTech and US pharmaceutical giant Pfizer, which was found to be well tolerated in early-stage human trials.

Meanwhile, data showed that Australia's trade surplus widened in May, but came below expectations of a Reuters poll.

However, Michael McCarthy, chief market strategist at CMC Markets, said the trade data was much better than the "terrible" numbers in April and was helping support the V-shaped recovery story. "At the moment, the optimism around government and central bank stimulus and potential for a vaccine cure is overwhelming the negativity around rising cases in southern states of the US and elsewhere."

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Leading gains in Australia, technology stocks jumped 3.7 per cent to hit a record peak, taking cues from its peers in the United States.

Afterpay soared 9.5 per cent to hit an all-time high and was the benchmark's second-biggest gainer after brokerage Citi more than doubled its price target on the buy-now-pay-later firm's stock.

Heavyweight financials also gained 1.9 per cent, led by the "Big Four" banks.

News of encouraging results about a potential vaccine, coupled with solid US manufacturing data, dented demand for safe havens and pushed gold stocks down 0.2 per cent.

Across the Tasman Sea, New Zealand's benchmark S&P/NZX 50 index climbed to its highest since June 9, ending up 1.3 per cent at 11,502.52.

Travel equipment retailer Kathmandu Holdings was the top gainer on the index, surging 11.4 per cent on positive same-store sales growth.


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