Australia: Shares up as Yellen backs more US stimulus

[SYDNEY] Australian shares ended firmer on Wednesday, taking cues from overnight gains in Wall Street, on expectations that a US$1.9 trillion US stimulus package would come through, while optimism over domestic corporate earnings also lent support.

The S&P/ASX 200 index closed 0.4 per cent firmer to stand at its highest level since Feb 25, 2020. The benchmark ended 1.2 per cent higher on Tuesday.

Janet Yellen, US President-elect Joe Biden's nominee for Treasury Secretary, urged lawmakers on Tuesday to "act big" on the next coronavirus relief package, arguing that the benefits outweigh the costs of a higher debt burden, helping all three major US indexes close higher.

"They're the right sort of comments the market wanted to hear, which has had a positive impact on Wednesday. It's giving people more certainty on what is going to happen," said Doug Symes, senior client adviser at Novus Capital.

"A couple of small companies have begun reporting results, and figures are indicating that things are improving - this is lending some confidence too. Things are going better than people hoped three or four months ago," he added.

Auto parts seller RPM Automotive Group, not an index constituent, advanced as much as 35.9 per cent after raising its 2021 revenue forecast by 44 per cent, while Ansell also rose after the glove maker forecast exceeding its earlier sales outlook.

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Morgan Stanley recently said the upgrade cycle for ASX200 stocks in calendar year 2021 was underway and saw some signs of an earnings revival to come through in the upcoming February earnings season, estimating high-single-digit earnings growth in fiscal 2021.

New Zealand's benchmark S&P/NZX 50 index rose 1.1 per cent to finish the session at 13,026.45.

REUTERS