Australia Market climbs to near three weeks high

The Australian share market finished session at highest in nearly three weeks on Monday, 10 August 2020, boosted by strong gains across all sectors, in particular financials, utilities, and consumer staples, thanks to renewed hopes of financial aid in the United States and as industrial activity in China gained strength.

At closing bell, the benchmark S&P/ASX200 index advanced 105.36 points, or 1.75%, to 6,110.20. The broader All Ordinaries was up 102.15 points, or 1.66%, to 6,247.07.

Investor sentiment was supported by expectations of further Covid-19 aid in the United States after the US House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin said on Sunday they were open to restarting talks after weeks of failed negotiations.

Deflation at China's factories eased in July, data showed, driven by a rise in global energy prices and as industrial activity climbed back towards pre-coronavirus levels. Industrial output in the world's second-biggest economy is steadily returning to levels seen before the pandemic paralysed huge swathes of the economy, driven by pent-up demand, government stimulus and surprisingly resilient exports.

Also supported the market was Victoria's lower COVID-19 infection numbers. The state remains in Stage 4 lockdown but on Monday recorded 322 infections, the lowest in two weeks. In an effort to slow the spread of infection, the state has imposed strict lockdown measures limiting people's movements and closed large parts of the economy.

Shares of banks and financials gained after Reserve Bank of Australia Statement on Monetary Policy suggesting the economy will not be strong enough to withstand an interest rate rise until at least 2023. Commonwealth Bank shares gained 3.4% to A$73.98, National Australia Bank shares gained 3% to A$17.46, Westpac gained 3.3% to A$17.36, and ANZ Bank gained 2.7% to A$18.17.

Property trusts and travel stocks climbed up, with Scentre Group up 3.4% to A$1.99 and Webjet up 4.2% to A$3.24.

Among the consumer staples cohort Blackmores, Woolworths, and Coles enjoyed the best gains. The vitamin-maker gained 3.1% to A$74.50, Woolies gained 2.8% to A$40.04 and Coles was up 2.6% to A$18.85.

CURRENCY NEWS: The Australian dollar changed hands at $0.7154, retreating from an earlier high of $0.7172.

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