Stimulus high hopes buoy ASX for third day

All sectors marched higher for the session led by technology, which notched a 7.4 per cent lift for the day.

People shop for fruit and vegetables at the Queen Victoria Markets, in Melbourne, Thursday, March 26, 2020. Picture: AAP

The local market notched a third day of gains on Thursday, buoyed by the passing of a massive $US2.2 trillion stimulus bill through the US Senate.

Hopes are high that the bill will swiftly pass through the House of Representatives prior to final approval from US President Donald Trump before the week is out.

Shares lifted early after a rally on Wall Street, its first two-day lift since the start of the coronavirus rout, but faded to near flat at lunch.

By the close, the benchmark S&P/ASX 200 was higher by 115 points, or 2.3 per cent, to a six-day high of 5113.3.

Meanwhile, the All Ords added 129 points, or 2.6 per cent, to 5135.2.

The Aussie dollar gained some ground against the US dollar ahead of key unemployment data to be released overnight, but was lower for the session at the local close - down 0.6 per cent to US59.24c.

It comes despite further job cuts locally, with Flight Centre, Virgin and Crown Group the latest casualties of wide-scale business closures.

Data from the ABS showed the extent of the hit to business, even before the shut downs were introduced, with a survey showing half of businesses were already under pressure and almost all expected to feel some impact from the virus restrictions.

Still, the local market outperformed the rest of the Asia-Pacific, with China’s Shanghai Composite trading down 0.2 per cent at the local close, as the Hang Seng slid by 0.3 per cent while Japan’s Nikkei stood out with a 3.5 per cent drop as the yen lost ground against the US dollar.

IG Markets analyst Kyle Rodda noted that despite the stimulus, the death toll and case count were still hanging over the market.

“The fundamental fact of the matter is the COVID-19 crisis is still getting worse, the economic downside still steep and unquantifiable, and huge bond buying sprees from central banks are unlikely to support the stock market on its own,” he said.

“Indeed, fiscal stimulus will help, but it will only soften the economy’s landing, rather than turning its trajectory immediately in the other direction.

“Hence, the rally in risk over the past few days appears more like a bear market rally: the big runs to the upside you see in very volatile markets like these. It means that the stock market’s trend likely remains pointed to the downside.”

To equities, and all sectors marched higher for the session led by technology, which notched a 7.4 per cent lift for the day.

Afterpay was a key driver, adding 29.4 per cent to close out the session at $19.41, while WiseTech added 10.3 per cent to $13.80, Altium jumped 6.6 per cent to $26.99, Appen rose by 6 per cent to $20.30 and Xero put on 3.7 per cent to $67.82.

Banks were mixed – Commonwealth Bank dragged with a 1 per cent slip to $61.80 while Westpac put on 1.1 per cent to $16.02, ANZ lifted by 0.8 per cent to $16.70 and NAB shot 2.2 per cent higher to $16.14.

Healthcare gains were led by a 6.2 per cent surge in CSL to $301.99. Cochlear added 8.4 per cent to $182.17 as it resumed trade after completing an upsized $880m capital raise.

To the miners, and BHP ticked lower by 2 per cent to $30.67, Rio Tinto gained 5.1 per cent to $88.13 and Fortescue pushed higher by 2.9 per cent to $10.52.

Northern Star led the worst performers after it warned of disruptions to its gold production from the coronavirus outbreak. The stock fell by 15 per cent to $11.47.

In other gold names, Evolution gave up 5.2 per cent to $4.16, Newcrest added 0.4 per cent to $25.98 and Saracen Mineral Holdings lost 3 per cent to $3.54.

Virgin soared by 17 per cent to 8.3c as it detailed the extent of its job cuts, similarly, Crown lifted by 9.8 per cent to $7.41 on its plan to slash jobs and Premier Investments shares added 1.5 per cent to $10.42 even as it said it was shutting stores.