Australia: Shares rise on stimulus, vaccine hopes

[SYDNEY] Australian shares closed higher on Tuesday, marking their best session since June 16, after the country's central bank advocated for further fiscal stimulus, boosting demand for riskier assets.

The S&P/ASX 200 index closed 2.6 per cent up at 6,156.30, highest since June 10. The benchmark had settled 0.6 per cent lower on Monday.

Reserve Bank of Australia (RBA) Governor Philip Lowe on Tuesday urged the government to borrow more and boost public spending to support the country's economic recovery.

Mr Lowe said the government could "smooth things out" through direct cash transfers to households and businesses as well as by boosting public spending on infrastructure and wage subsidy schemes.

"The RBA talked up the labour market and kept the status quo in many ways. This is the biggest driver today coming up from a flat US market close," said Brad Smoling, managing director at Smoling Stockbroking.

Promising early data from trials of three potential Covid-19 vaccines, which bolstered hopes that vaccines against the disease might be ready by the end of year, also supported market sentiment.

The Technology sector, which rose 5.7 per cent and closed at a record high, was the top gainer on the Australian benchmark index.

New Zealand's benchmark S&P/NZX 50 index closed 1.6 per cent higher at 11,736.73.

REUTERS