Australian shares rise as country’s biggest state unveils reopening plan

Broad-based gains pushed Australian shares higher on Monday, as plans to gradually reopen the country’s most populous state after a weeks-long coronavirus lockdown boosted hopes of a pick up in economic activity.

The S&P/ASX 200 index rose 1.3 per cent to 5,461.2 points. The index marked its third straight weekly gain on Friday as Australia eases social distancing restrictions, which have taken a devastating toll on the economy and put it on course for its first recession in three decades.

In the latest move to ease lockdowns, New South Wales – home to Sydney – will allow restaurants, playgrounds and outdoor pools to reopen by the end of the week after extensive testing showed a sharp slowdown in the spread of new infections.

Financial stocks advanced 1.2 per cent and underpinned the rally. Three of the country’s “Big Four” banks rose between 0.5 per cent and 0.9 per cent.

Macquarie Group hit a near two-month high as brokerage Jefferies raised its price target for the stock, even after the investment bank reported dismal full-year results last week.

Broader sentiment was also helped by moves by some European countries to ease virus restrictions, although South Korea and Germany reported a rise in new cases.

Increasing optimism that lifting lockdown measures will boost economic activity helped markets, said Michael McCarthy, chief market strategist at CMC Markets and Stockbroking.

Export-oriented mining stocks gained 1.1 per cent, with index heavyweights BHP Group and Rio Tinto firming 0.6 per cent and 1.4 per cent, respectively.

Gold stocks gained on the back of higher bullion prices, as the country’s biggest listed gold producer Newcrest Mining advanced 0.7 per cent.

Spot gold rose 0.25 per cent to $1,707.30.

“Gold held higher ground and short-dated bonds continued their rally, suggesting some investors are seeking higher levels of capital protection,” McCarthy said.

Energy stocks were higher even as oil prices declined. Gas producer Woodside Petroleum and petrol station operator Caltex Australia rose 2.4 per cent and 2.7 per cent, respectively.

Brent crude futures fell 1.65 per cent to $30.46 a barrel while US West Texas Intermediate (WTI) crude lost 1.86 per cent to $24.28 per barrel.

The number of issues on the ASX that advanced were 1,105 while 551 declined as a 2-to-1 ratio favoured advancers.

New Zealand’s benchmark S&P/NZX 50 index ended 0.6 per cent higher at 10,760.29 points, helped by gains in the financial and industrial sectors.

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