Australia: Shares notch best week in 2 months on broader global rally

[SYDNEY] Australian shares notched their best week since mid-November, tracking a broader global rally as investors priced in further US stimulus and swift economic recovery, although gains were tempered on Friday as the city of Brisbane went into a lockdown.

The S&P/ASX 200 index ended 0.7 per cent higher at 6,757.9 points. The session's gains helped the benchmark post a 2.6 per cent weekly rise, its biggest since Nov. 13, 2020.

Bets that a Democrat-controlled Senate would help President-elect Joe Biden implement further stimulus in the near future helped boost sentiment through the week, while the Australian government's plan to accelerate planned inoculation against Covid-19 also supported risk appetite.

With the Democrats in control of the presidency, the Senate and the House, we will likely see the stimulus packages that people have talked about and that's driving global markets at the moment, said Damian Rooney, director of equity sales at Perth-based Argonaut.

Index gains were curbed on Friday as Australia's third-largest city entered a three-day lockdown, after the discovery of a case of the more contagious variant of Covid-19 that emerged in Britain.

"We have a small outbreak, but a small outbreak can become a pretty big outbreak pretty quickly in Brisbane and the lockdown there which just reminds everyone of the fragility of our situation," Mr Rooney added.

The tech sub-index ended 2.5 per cent higher, as buy-now-pay-later firms such as Afterpay and Zip Co recouped previous session's losses.

Australian energy stocks, buoyed by rising oil prices after major producer Saudi Arabia pledged to cut production, posted their best week since Nov 13, 2020.

New Zealand's benchmark S&P/NZX 50 index closed 0.5 per cent firmer and posted its third consecutive weekly gain.

REUTERS