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Australia: Shares seek footing after rout on hopes of more stimulus salve
[BENGALURU] Australian shares rose on Friday after a 10 per cent slump over the past two sessions as the government signalled a second round of stimulus spending, furthering a worldwide effort to fight the coronavirus pandemic that has stalled global growth.
As of 0112 GMT, the S&P/ASX 200 index rose 146.8 points, or 3.1 per cent, to 4,935. The benchmark, however, was set to drop more than 10 per cent for a second straight week.
The big banks powered most of the benchmark's gains, with Westpac Banking Corp and National Australia Bank adding more than 9 per cent each, while Commonwealth Bank of Australia gained 5 per cent.
Australian banks said they will defer loan repayments for small businesses impacted by coronavirus for six months.
The government is likely to unveil a second stimulus package within days, sources familiar with the plan told Reuters, and while its size is yet to be determined, Australian media reported it could be worth around 3 per cent to 4 per cent of Australia's A$2 trillion economy.
On Thursday, the Reserve Bank of Australia slashed interest rates further and embarked on a quantitative easing programme for the first time.
"Further fiscal stimulus will improve impact, but a downturn won't be avoided," analysts at Morgan Stanley wrote in a note.
A Reuters poll showed economists believe the global economy is already in a recession as the hit to activity from the coronavirus pandemic has become more widespread.
A rebound in oil prices on the day helped lift energy stocks, which have been battered this month following an oil price war between Russia and Saudi Arabia.
Oil Search and Santos climbed more than 8 per cent each.
In New Zealand, the benchmark S&P/NZX 50 index dipped 0.2 per cent to 9,097.17, and was set for its second consecutive week of sharp losses.
Flag carrier Air New Zealand sunk as much as 40.3 per cent, suffering its worst intraday session in more than 18 years. This was despite New Zealand authorities announcing a US$514 million lifeline for the airline.
Helping offset the losses was a 11.8 per cent rise in Synlait Milk and a2 Milk Company's 5.6 per cent gain.