You are here

Australia: Shares rise as Federal Reserve's bond purchase update boosts sentiment

AB_asx_160620.jpg
Australian shares jumped more than 3 per cent on Tuesday and were set to snap three sessions of losses, as the Federal Reserve's modification of its bond purchase programme boosted risk sentiment.

[BENGALURU] Australian shares jumped more than 3 per cent on Tuesday and were set to snap three sessions of losses, as the Federal Reserve's modification of its bond purchase programme boosted risk sentiment.

The S&P/ASX 200 index rose 3.2 per cent to 5,901.5 in early trade. It had ended 2.2 per cent lower in the previous session and is down 14.43 per cent so far this year.

The Fed's decision to try to make more companies' securities eligible for a liquidity boost from its bond purchase programme soothed investors rattled by fears of a resurgence in coronavirus cases worldwide over the weekend.

Overnight, the US Dow Jones Industrial Average rose 0.62 per cent, the S&P 500 gained 0.83 per cent, while Nasdaq rose 1.43 per cent.

Data released on Monday showed quickening industrial output growth in Australia's biggest trading partner China, further buoying sentiment.

Your feedback is important to us

Tell us what you think. Email us at btuserfeedback@sph.com.sg

Financial stocks gained 3.7 per cent, with all of the 'big four' banks rising over 3 per cent.

Miners rose 2.34 per cent, with global miners BHP Group and Rio Tinto advancing 1.5 per cent and 1.8 per cent, respectively.

Chinese iron ore futures on the Dalian Commodity Exchange rose 0.1 per cent.

The energy subindex rose 4.32 per cent, after oil prices surged overnight on signs of demand recovery and hopes that Opec+ members would stick to promises of an output cut.

Brent crude futures fell 0.33 per cent to US$39.59 a barrel while US West Texas Intermediate (WTI) crude lost 0.62 per cent  to US$36.89 per barrel.

Viva Energy Group Ltd was the top gainer on the benchmark index, despite forecasting lower first-half core profit.

The company also brought forward planned maintenance at a unit of its Geelong refinery.

The number of issues on the ASX that advanced were 957, while 184 declined as a 5.2-to-1 ratio favoured advancers.

In New Zealand, the benchmark S&P/NZX 50 index rose 1.04 per cent to 10,977.5.

Utilities co Meridian Energy jumped 2 per cent, while Goodman Property Trust rose 1.2 per cent.

REUTERS

BT is now on Telegram!

For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes