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Australia: Shares rebound 2% on RBA rate-cut hopes; New Zealand jumps
[BENGALURU] Australian shares rose 2 per cent on Tuesday after seven straight sessions of declines, as investors priced in a possible rate cut by the central bank to help cushion an economic blow from the coronavirus outbreak.
The S&P/ASX 200 index was up 1.9 per cent, or 122.9 points, at 6,514.4 by 0100 GMT, after shedding 10.8 per cent in the last seven sessions - its longest losing streak since September 2018.
The Reserve Bank of Australia is expected to cut its cash rate to a new low of 0.5 per cent from 0.75 per cent at its monthly review later in the day, as investors pinned hopes on a coordinated global monetary policy response after last week's stock market plunge.
Fears of a pandemic rattled markets last week, wiping more than US$5 trillion from global share values, and stoking widespread expectations of monetary policy easing.
Australian financial futures are now almost fully pricing in a quarter point cut to the cash rate. Last week, futures implied a one-in-five chance of such a move.
"Given Australia's current moderate growth environment, limited room for monetary easing and the Covid-19 impact on supply chains and demand, we think it is necessary for fiscal policy to also support growth," Cherelle Murphy, a senior economist at ANZ Research, said in a note.
Financials gained 1.5 per cent, with the "Big Four" banks trading in positive territory. Westpac Banking Corp and National Australia Bank rose about 2 per cent each.
The tech sector jumped nearly 5 per cent, its best intraday gain in 18 months, tracking Wall Street peers.
Software maker Xero added 7.4 per cent and buy-now-pay-later firm Afterpay surged 8.3 per cent.
Healthcare firms climbed as much as 3.4 per cent, their biggest in six months. Drugmaker CSL added 3.3 per cent, while US-based Resmed Inc gained 6.3 per cent.
Meanwhile, global miner BHP Group added up to 3.4 per cent, Rio Tinto advanced 4.7 per cent and Fortescue Metals Group climbed 5.5 per cent, supported by substantial gains in iron ore prices on Monday.
Across the Tasman Sea, New Zealand's benchmark S&P/NZX 50 index jumped as much as 3.7 per cent in its best intraday gain since August 2011.
The bourse was up 3 per cent, or 334.87 points, at 11,439.97 by 0100 GMT.
Air New Zealand and Tourism Holdings were the best performers on the index, adding up to 10.1 per cent and 7.9 per cent, respectively.