Australia: Shares rise on US stimulus; NZ hits 2-week high

[BENGALURU] Australian shares settled higher for a third straight session on Thursday, as investor sentiment was lifted by the US Senate passing a massive stimulus package to mitigate the economic blow from the coronavirus epidemic and curb its spread.

The S&P/ASX 200 index climbed 2.3 per cent to 5,113.30, its highest close in a week, after Wednesday's 5.5 per cent gain.

The Senate passed the US$2 trillion bill to help unemployed workers and industries hurt by the epidemic, as well as to provide much-needed funding to buy urgently needed medical equipment. The bill provides, among others, at least US$100 billion for hospitals and related health systems.

In Australia, the healthcare sector, which is heavily exposed to the US market, was among the biggest gainers in the index, adding 6.5 per cent.

Also helping the sector was a weaker Australian dollar as these companies earn a significant portion of their revenue overseas.

Biotech company CSL Ltd advanced 6.2 per cent, while Sonic Healthcare jumped nearly 10 per cent.

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However, doubts regarding the effectiveness of measures taken to cushion the economic blow remained, with the local market likely focussing more on reaction from China, the country's largest trading partner.

"The US package will have an impact here but the economy that the Australian market will be focussing on is China and what sort of stimulus they put in place," said James McGlew, executive director of corporate stockbroking at Argonaut.

"Whilst the stimulus is both welcome and necessary, the uncertainty remains and will dominate the mood of investors."

Among miners, heavyweights Rio Tinto and Fortescue Metals Group climbed nearly 5 per cent and 3 per cent, respectively.

Financials ticked 0.4 per cent higher, with the second-largest bank Westpac Banking Corp and peer National Australia Bank adding 1 per cent and 2.2 per cent, respectively.

Meanwhile, the Reserve Bank of Australia proposed to buy A$3 billion (S$2.58 billion) in sovereign government bonds as part of its quantitative easing programme to keep short-term yields around the cash rate of 0.25 per cent.

In New Zealand, the benchmark S&P/NZX 50 index added nearly 4 per cent to settle at 9,632.47, its highest in two weeks.

A one-month lockdown started to curb the spread of the outbreak as cases neared 300. The finance minister said the epidemic would impact jobs "significantly worse" than the global financial crisis.

Electricity generator Meridian Energy and dairy firm a2 Milk Co tacked on nearly 4 per cent each.

Auckland International Airport jumped 6.4 per cent, after the airport operator said it suspended selected capex projects due to the virus' impact on the tourism and aviation market.

REUTERS