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Australia Market surges on US stimulus hopes

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The Australian share market finished session higher on Tuesday, 24 March 2020, as investors chased for bottom fishing after global authorities ramped up stimulus measures to combat the economic impact of the global coronavirus outbreak. All sectors finished in green with financials, energy, materials, and real estate issues being notable gainers. At closing bell, the benchmark S&P/ASX200 index advanced 189.67 points, or 4.17%, to 4,735.70. The broader All Ordinaries added 189.17 points, or 4.14%, to 4,753.30.

Investors were encouraged after the U. S.

Federal Reserve announced an open-ended asset purchase program on Monday, while Germany is set to unveil major stimulus measures as the death toll from the virus rises throughout Europe.

The Fed said it would purchase Treasurys and mortgage-backed securities in the amounts needed to support smooth market functioning, showing the central bank is willing to go far beyond the $700 billion in new purchases announced last week. The region was also up on hopes that US lawmakers will bridge their differences and pass a US$1.8 trillion economic support package.

Shares in banks and financials inclined as the country's central bank continued to flood the financial system with liquidity. The Reserve Bank of Australia (RBA) pumped A$6.88 billion (S$5.95 billion) into the financial system on Tuesday, well above its original intention. Commonwealth Bank of Australia climbed the most among the four.

The energy stocks advanced, with Santos up 20.6%, New Hope Corp up 17.2%, and Woodside Petroleum up 5.6%.

The real estate sector was boosted by a 12 per cent rise in Goodman Group and 18 per cent gain in GPT.

Gold miners were also big improvers with Ramelius Resources (RMS) jumping 24%. Perseus Mining (PRU) is also lifting more than 23% while Saracen Minerals (SAR) and Resolute Minerals (RSG) are both climbing more than 18%.

GrainCorp dragged on the consumer staples sector when it started trading for the first time since the United Malt demerger, falling 31 per cent. And Virgin Money dropped nearly 16 per cent as the UK, where it is based, implements tougher measures to fight the COVID-19 outbreak.

CURRENCY: The Australian dollar climbed 1.5 per cent to $0.5915 and away from a 17=year low of $0.5510.

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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, March 24 2020. 11:36 IST