Australia shares advance on new stimulus hopes
The S&P/ASX 200 index was up 1.06% at 5,385.40, following a 1.72% closing low on Thursday
Australian shares advanced on Friday, with energy and mining sectors leading the gains, as investors cheered the prospects of more fiscal stimulus in the United States and China.
The S&P/ASX 200 index was up 1.06% at 5,385.40, as of 1249 GMT, following a 1.72% closing low on Thursday. The benchmark was on track for a third straight weekly gain.
Stock markets globally have rallied more than 30% since their March lows following unprecedented government stimulus measures and central bank interventions to counter the impact of economic lockdowns.
U.S. President Donald Trump said on Thursday he would be open to negotiating another possible stimulus bill, while China acknowledged it needs a more active fiscal policy as pressure on its economy is still increasing.
Analysts expect the National People’s Congress, which opens a key session on May 22, to approve a raft of relief measures to shore up the economy.
The Australian energy sector firmed as much as 2.6%, helped by a gain in oil prices, but was on track for its first weekly loss in two.
Industry heavyweight Santos was up nearly 4%, while Oil Search climbed about 4.7%.
Hopes for more stimulus in China and expectations of higher demand boosted iron ore prices, as a result helped Australian mining stocks rise as much as 2.3% to their highest since May 1. The sub-index was poised for its second straight weekly gain.
The world’s top miner BHP Group gained up to 2.6%, while Rio Tinto advanced more than 1%.
Gold stocks added more than 3.5%, helped by a jump in bullion prices, with West African Resources gaining over 6% and Ramelius Resources climbing more than 5%.
Meanwhile, New Zealand’s S&P/NZX 50 index slipped 0.3% to 10,708.86, after a survey showed that monthly manufacturing activity in the country fell to its lowest level amid market uncertainty caused by the coronavirus pandemic.
The benchmark, however, was also on track for a third straight weekly gain.
The top percentage losers were Tourism Holdings Ltd, down 5.03%, followed by Fisher & Paykel Healthcare Corp, losing 2.51%.