Australia Market surges on stimulus, vaccines hopes

The Australian share market finished session higher on Tuesday, 21 July 2020, as investors risk appetite buying underpinned after the country's central bank advocated for further fiscal stimulus. Meanwhile, hopes for the development of a COVID-19 vaccine in Britain which has shown positive results in trials also lifted the market mood.

At closing bell, the benchmark S&P/ASX200 index spurted 154.73 points, or 2.58%, to 6,156.30. The broader All Ordinaries surged 156.52 points, or 2.56%, to 6,268.79.

Australia's shares were firm from the outset after the country's central bank advocated for further fiscal stimulus. Reserve Bank of Australia (RBA) Governor Philip Lowe on Tuesday urged the government to borrow more and boost public spending to support the country's economic recovery. Lowe said the government could "smooth things out" through direct cash transfers to households and businesses as well as by boosting public spending on infrastructure and wage subsidy schemes."The RBA talked up the labour market and kept the status quo in many ways.

Overall market sentiment also improved after a team of scientists at Oxford University said their experimental coronavirus vaccine has been shown in an early trial to induce an immune response. The positive results of recent tests in the United States and Britain provided something for the market to look forward to, to help an economic recovery.

The Technology sector rose 5.7% and was the top gainer on the Australian benchmark index. WiseTech Global closed 4.3% higher, while Afterpay added nearly 8%.

Healthcare stocks rose 3.7%, cheering the potential vaccine results, with CSL Ltd gaining 3.9%, and Cochlear firming 5.7%. The heavyweight financial index rose 3%, with the Big Four banks closing above 2%.

Australia's travel stocks also rebounded, with travel services provider Corporate Travel Management closing over 9% higher.

CURRENCY NEWS: The Australian dollar traded at $0.7042, climbing from levels near $0.6960 in the previous week.

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