Australia Market gains on firm recovery bets

The Australian share market finished session steep Monday, 01 June 2020, as investor sentiments was lifted by stronger commodity prices and hopes for further easing of pandemic-induced curbs. However, market gains capped due to fears of a resurgence of the coronavirus in the United States amid riots across many cities there. At closing bell, the benchmark S&P/ASX200 index advanced 63.5 points, or 1.1 per cent, to 5819.2. The broader All Ordinaries dropped 85.61 points, or 1.44%, to 5,872.20.

Investor sentiment was lifted after several Australian states eased social distancing restrictions further, allowing restaurants to host more people and public attractions to reopen.

However, market gains capped due to fears of a resurgence of the coronavirus in the United States following a weekend of riots and protests in the US, including outside the White House, in the wake of the death of George Floyd in police custody last week.

Nerves were also jangling after US President Donald Trump's address on China over the weekend. But that missive did not turn out as inflammatory as the market had predicted. Tensions between Washington and Beijing remain elevated - especially after President Trump reiterated Hong Kong's special trading status with the US was under threat - but he did not withdraw from the phase one US-China trade agreement signed in January. Trump also declined to impose sanctions on Chinese officials.

Looking ahead, the Reserve Bank of Australia's policy meeting on Tuesday will be the highlight of the week, though markets expect no major surprises.

Materials sector was the star of the day, up 3.1 per cent, after iron ore broke through the psychological $US100 per tonne barrier. Spot gold was also 0.9 per cent higher at near eight-year highs of $US1742.33. Shares of BHP and Rio Tinto each touched a more than three-month high, while Fortescue surged 6.2 per cent to a record high. Gold miner Newcrest also joined the party with a 2.75 per cent rise.

CURRENCY NEWS: The Aussie dollar gained 1.3 per cent against the US greenback to a four-month high of US67.53c.

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