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Australia: Shares mark best quarter in nearly 11 years
[SYDNEY] Australian shares rose on Tuesday after the country's central bank played up prospects of fresh stimulus and as employment continues to recover from the lockdown, although a spike in Covid-19 cases globally and at home kept gains in check.
The S&P/ASX 200 index jumped as much as 2.4 per cent, but pared some gains to finish 1.4 per cent firmer at 5,897.90. The benchmark was up nearly 17 per cent for the quarter, marking its best quarter since September 2009.
Reserve Bank of Australia Deputy Governor Guy Debelle said the economy will need "considerable" support for some time, adding it would be a "problem" if the government ended fiscal stimulus in September as initially flagged.
Meanwhile, domestic employment continued to pick up gradually after the huge losses caused by the coronavirus lockdown, recovering around 30 per cent of the jobs initially shed.
Brad Smoling, managing director at Smoling Stockbroking, warned that there is going to be a pretty big reversion as "we're seeing the results of government interventions and stimulus hopes in the market right now."
"It's all fairy dust, for lack of a better word. Once the reality kicks in that stimulus is starting to wear off and companies are in bad shape, the market will have to come off."
Sentiment got a further boost after data showed that factory activity in China, the country's top trading partner, had expanded at a stronger pace in June.
Financials stocks underpinned the bullish sentiment, gaining 1.2 per cent after Mr Debelle said Australia does not need negative interest rates.
New Zealand's benchmark S&P/NZX 50 index recorded its best quarter ever. The index closed up 1.8 per cent at 11,451.05, its highest level since June 9.