Australia Market moves higher on ECB, US stimulus

The Australian market closed higher on Friday, 12 March 2021, with investor sentiment boosted by a continued Wall Street rally after U.S. President Joe Biden signed fresh coronavirus relief legislation. At closing bell, the benchmark S&P/ASX200 advanced 52.89 points, or 0.79%, to 6,766.81. The broader All Ordinaries was up 61.69 points, or 0.89%, to 7,014.61.

Market commenced trading with firm footing, as economic recovery hopes were swelled by U.S. President Joe Biden signing the $1.9 trillion coronavirus relief package into law. U.S. President Joe Biden signed the $1.9 trillion coronavirus relief package, which will send direct payments of up to $1,400 to most Americans.

Stocks gained further ground after the European Central Bank said after its monetary policy meeting that it would ramp up the pace of its pandemic emergency bond buying, in a clear bid to soothe market jitters about a rise in government borrowing costs and inflation. Bond yields in the euro zone have been ticking higher since February, in line with the yield on U.S. Treasury notes.

All sectors saw improvement today with IT, energy and materials leading the way. IT was up 2.3%, followed by materials with a 1.6% gain. Consumer staples was the worst performing sector, flat at +0.02%.

In economic news, in Q4 2020 all states and territories recorded positive growth in state final demand, with Victoria outperforming. NSW and Vic are the only jurisdictions that have not yet reached pre-COVID output levels. Building approvals are outperforming in states where local stimulus programs are also on offer. NSW is the laggard.

CURRENCY NEWS: The U.S. dollar rose 0.33% to 91.722 against a basket of its peers on Friday afternoon during Asia trading hours. The Australian dollar fell 0.44% to $0.7753.

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