Australia shares post record daily gain after stimulus package

[SYDNEY] Australian shares rose 7 per cent on Monday in their biggest single-day jump in history, as a stimulus package to invigorate the coronavirus-hit economy and a slowdown in the rate of daily infections spurred buying.

The S&P/ASX 200 index closed 339 points higher at 5,181.40, recovering from a steep 5.3 per cent fall on Friday.

Prime Minister Scott Morrison committed A$130 billion (S$113.8 billion) to help save jobs as shockwaves from the virus pandemic rip through the economy.

Australians were asked on Sunday to further isolate themselves from the public to keep the virus from spreading even as authorities said the rate of daily infections has halved in recent days.

"The Covid-19 data is actually starting to look better with the number of infections declining for four days in a row now," said Marc Kennis, principal of Pitt Street Research.

"So, that may have led to some optimism for certain sectors, like the banks, as it could mean that the lockdown may not be as long as some people had expected."

Meanwhile, the Chinese central bank unexpectedly lowered the interest rate on reverse repurchase agreements to 2.2 per cent from 2.4 per cent, as authorities stepped up easing measures to relieve pressure on the economy that has been hit hard by the epidemic.

Australia depends heavily on China's economic health as the Asian nation is its largest trade partner.

Healthcare stocks were the day's best performers, with the sub-index gaining 11.4 per cent in its biggest jump since June 22, 2001.

Ansell Ltd settled nearly 25 per cent higher for its biggest daily gain since October 1987, after the glove maker reiterated its full-year outlook, citing strong demand for its products.

Industry heavyweight CSL advanced about 12 per cent, marking its best day since Jan 19, 2017.

"The health care sector remains the best growth story in the current environment," said Mathan Somasundaram, a market portfolio strategist at Blue Ocean Equities, adding that it had been the only industry to outperform its US counterpart over the last five years.

Financial stocks closed 8.8 per cent higher, their best since March 17, with all the "Big Four" banks adding more than 7 per cent.

The mining sector finished 3.8 per cent higher, with BHP Group rising 4 per cent while Rio Tinto climbed 2 per cent.

New Zealand's benchmark S&P/NZX 50 index rose about 1.1 per cent to 9,661.19, with Contact Energy gaining 3.1 per cent, while Synlait Milk ended 4.2 per cent higher.

The Reserve Bank of New Zealand said it would deploy more tools to provide additional liquidity to the companies and support market functioning.

REUTERS

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