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Australia: Shares see best day in over 2 months on Fed support

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Australian shares jumped the most in more than two months on Tuesday as the US Federal Reserve's move to start buying corporate bonds and upbeat remarks from the domestic central bank boosted investor confidence.

[SYDNEY] Australian shares jumped the most in more than two months on Tuesday as the US Federal Reserve's move to start buying corporate bonds and upbeat remarks from the domestic central bank boosted investor confidence.

The S&P/ASX 200 index rose 3.89 per cent to 5,942.3 points at the close of trade, snapping three straight sessions of losses. The benchmark fell 2.2 per cent on Monday.

The Fed said it would start purchasing corporate debt on Tuesday, adding to other emergency facilities launched to improve market functioning in the wake of the Covid-19 pandemic.

Further boosting sentiment, minutes of the Reserve Bank of Australia's latest meeting showed that the country's economic downturn could be shallower than earlier expected. Data showing an uptick in jobs through May further cemented these hopes.

"As restrictions are lifted, we expect to see the (labour market) recovery strengthen through June and into Q3," ANZ analysts said in a note.

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Financial stocks rose as much as 5.4 per cent and dominated the gains. The "Big Four" banks firmed between 4.1 per cent and 4.5 per cent.

The number of issues on the ASX that advanced were 1,291, while 430 declined as a 3-to-1 ratio favoured advancers.

In New Zealand, gains on the benchmark index were capped after the country reported two new cases of the coronavirus, ending a 24-day streak of no new infections.

The S&P/NZX 50 index rose 0.8 per cent to finish the session at 10,953.85.

REUTERS

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