Australia shares end higher on hopes pandemic is peaking

Australia shares end higher on hopes pandemic is peaking

Australian shares closed higher on Thursday amid hopes the coronavirus outbreak was nearing a peak in the United States, while positive comments about the strength of Australian lenders by the central bank also boosted sentiment.

The S&P/ASX 200 index closed up 3.5 per cent, or 180.4 points, at 5,387.3, tracking overnight gains on Wall Street. With a weekly gain of 6.3 per cent, the benchmark clocked its best week since December 2011.

New York Governor Andrew Cuomo said the state’s efforts at social distancing were working in controlling the virus’ spread as hospitalizations reduced on Tuesday from the day before, offering a spot of relief to investors.

“Signs that the number of new daily coronavirus cases is plateauing are driving expectations that social distancing measures will be lifted soon in parts of the world,” Stephen Innes, chief market strategist at AxiCorp, said in a note.

“Relaxing social distancing is the new ‘risk-on’ barometer.”

Adding to the relief, the Reserve Bank of Australia said banks were well-positioned to withstand the coronavirus-driven economic slump, although it flagged some potential weaknesses in the property market.

The heavyweight financials sub-index ended 4 per cent higher, with the country’s “Big Four” banks all clocking robust gains.

Biggest lender Commonwealth Bank rose 3.3 per cent, while Australia and New Zealand Banking Group gained 6.6 per cent.

Lawmakers approved the country’s biggest financial package on Wednesday to blunt the virus’ economic impact and subsidise the wages of 6 million people for at least the next six months.

Healthcare stocks led gains on the benchmark, finishing 4.6 per cent higher.

Pharmaceutical giant CSL Ltd, which is among the index’s biggest stocks, soared 5.5 per cent after it reaffirmed its earnings forecast for fiscal 2020 despite pressure from coronavirus-related disruptions.

Miners also posted gains, adding 0.9 per cent as iron ore prices firmed. Mining heavyweights Rio Tinto Ltd and BHP Group Ltd both clocked modest gains.

Energy stocks jumped 3.9 per cent as oil futures gained on expectations that top oil producers would agree on production cuts at a meeting later in the day.

Woodside Petroleum Ltd and Santos Ltd tacked on 3.9 per cent and 3.8 per cent, respectively.

New Zealand’s benchmark S&P/NZX 50 index fell 0.7 per cent, or 67.76 points, to finish the session at 9963.90.

Medical device maker Fisher & Paykel Healthcare Corp Ltd eased 5.7 per cent, while electricity generator Meridian Energy Ltd lost 4 per cent.

Financial markets in Australia and New Zealand will be closed for holidays on Friday and Monday, and will resume trading on Tuesday, April 14.

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