Australia: Shares pare gains as health stocks offset US stimulus boost

[BENGALURU] Australian shares pared early gains to end steady on Friday as investors lapped up US President-elect Joe Biden's plans for a massive stimulus package, though tepid performances in domestic healthcare stocks weighed on the benchmark.

Mr Biden's outline for a US$1.9 trillion stimulus package to jump-start the world's largest economy came after US Federal Reserve chair Jerome Powell said the central bank would not raise interest rates nor reduce bond purchases anytime soon.

The S&P/ASX 200 index rose as much as 0.6 per cent to 6,752.4 before closing flat on Friday, but ended 0.6 per cent lower for the week.

"At the moment, the market continues to push higher as there's more stimulus, lower rates for longer and there is no alternative ... so it's hard to get too bearish," said Henry Jennings, senior analyst at Marcus Today financial newsletter.

Corporate profit and, more importantly, their outlook will be the next factors to look out for, Mr Jennings added.

Sentiment was also lifted as Australia was set to see a second straight day with no local Covid-19 infections, bolstering hopes that states would soon ease virus curbs.

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Miners rose 0.8 per cent as fears of tight supply amid fresh virus curbs in China sent iron ore futures higher. Global miners BHP Group and Rio Tinto climbed 1.7 per cent and 0.7 per cent, respectively.

Buy-now-pay-later firm Afterpay surged 10 per cent after a strong market debut by a US rival, almost single-handedly helping the tech sub-index end 2.6 per cent higher.

On the flip side, export-reliant healthcare stocks eased for a fourth session in five as the US dollar weakened on Mr Powell's dovish stance on interest rates.

Weakness in financials, gold and consumer stocks offset early gains on the benchmark.

New Zealand's benchmark S&P/NZX 50 index fell 0.7 per cent to finish the session at 13,024.69. The index lost 3.9 per cent over the week, its worst since March last year.

REUTERS