US stimulus deal rockets ASX up 5.5pc

A late rally on the ASX clinched its first two-day lift since the start of the coronavirus rout as US politicans reached a deal on their stimulus plan.

David Rogers and Melissa Yeo

46 min read

5:57AMMarch 25, 2020.

Updated 8:43PMMarch 25, 2020

The trading floor of the New York Stock Exchange is closed because of coronavirus concerns. Picture: AP

Cochlear halted for $800m raise
Tech, travel names back in favour
Virgin to stand down 8000 workers
Dow Jones’ best day since 1933

That's all from the Trading Day blog for Wednesday, March 25. The ASX surged by 6pc early but has faded to just 2.5pc as health stocks wind back after Prime Minister Scott Morrison suspended elective surgeries to free up space for coronavirus treatment. Battered stocks in the technology and travel sectors are leading today’s rebound as risk appetite grows.

It comes after world markets jumped on news of US Fed bond buying and rising hopes for a US stimulus plan. The Dow jumped 11.3pc, its biggest rally since 1933, while the S&P 500 gained 9.4pc and the Nasdaq rose 8.1pc.

4.23pm: Senate passes $US2tn stimulus

Senate Democrats and Republicans have reached a deal on a $US2 trillion ($3.3 trillion) stimulus plan to respond to the economic shock of the coronavirus outbreak.

Bloomberg broke this news at 0359pm Australian time, citing unnamed people familiar with the talks. The result was a 150 point jump in Australia’s S&P/ASX 200 while the Aussie dollar surged 57 points or 0.9pc from 0.5980 to a 1-week high of 0.6035

Negotiators were working on a package that includes billions in assistance to companies and states and cities, cheques to most Americans, loans and aid for small businesses to maintain their payrolls, more expansive unemployment insurance, deferrals of taxes, and numerous other provisions, Bloomberg says.

The report adds that the Senate could vote as soon as Wednesday and the House also would need to pass the bill before it gets to President Donald Trump’s desk.

US senators reportedly agreed the latest stimulus plan (~$2trn). Now has to be passed by the House via unanimous consent or else there will be a delay has Congress members will have to return to Washington

Trump sounds a bit optimistic in talking of reopening the econ by Easter pic.twitter.com/YdfAOD4Qt6
— Shane Oliver (@ShaneOliverAMP) March 25, 2020

4.14pm: Late surge sends ASX up 5.5pc

In another rollercoaster session for Australian shares, the market surged out of the gates, gave up most of its daily gains but strode higher in the closing march to clutch its first two-day win streak in five weeks, since the start of the coronavirus rout.

By the close, the benchmark ASX200 was higher by 262.4 points or 5.54 per cent at 4998.1, still off a daily high of 5024.5 hit early in the session.

News of bipartisan agreement on US stimulus plans was the key driver of the late rally - with the two sides said to have passed a stimulus deal worth $US2 trillion.

4.04pm: First signs of US stimulus approval

Both sides of US politics have reached bipartisan agreement on a virus stimulus plan, according to Bloomberg.

No details yet but this is potentially huge news for markets and may send risk assets soaring again tonight.

Australia’s S&P/ASX 200 is up 3.3pc and looks like going vertical into the close.

Japan’s Nikkei 225 has extended its rise to 7pc.

S&P 500 futures have halved their intraday fall to 0.8pc.

Reports out saying agreement has been reached on US stimulus plan.

Market popping but doesn't seem overly convinced? Or already priced in? pic.twitter.com/ycy38NfpN9
— IGSquawk (@IGSquawk) March 25, 2020

John Stensholt 3.58pm: Virus no dampener on Lotto demand

One in three Australians are still expected to buy a ticket in Thursday night’s $80m Powerball draw, with sales tracking in line with Tabcorp management’s usual expectations.

The Coronavirus has failed to put a dampener on ticket sales for the popular lottery, with the vast majority retail outlets remaining open across the country and ticket sales also still taking place at newsagents, convenience stores, supermarkets and petrol stations.

Tabcorp told The Australian on Wednesday that both retail and online ticket sales for Powerball were tracking in line with the usual patterns of any lottery of this magnitude. The jackpot has been climbing for the past six weeks and is only the sixth time in Powerball’s 24-year history that an $80m jackpot has been offered.

“If one person takes home the entire $80 million prize tomorrow night, they’ll become Australia’s third largest individual lottery winner ever,” Tabcorp said. The biggest individual winner took home about $107m in January last year.

One in three Aussies are set to buy a ticket in Thursday’s Powerball draw.

3.55pm: House prices to fall 5-10pc: Capital Eco

Capital Economics expects Australian house prices to fall 5pc-10pc from a peak in the June quarter.

Senior economist Marcel Thieliant says a government ban on home auctions and open house viewings to stop the spread of coronavirus will probably result in lower home sales and he sees a mounting risk that the government will impose a ban on “non-essential services” including the buying and selling of real estate which would “result in a slump in home sales”.

“Even once restrictions to prevent the spread of coronavirus come to an end, we suspect that rising unemployment and tightening bank lending conditions will result in weak housing demand and falling house prices,” Mr Thieliant warns.

“On the demand side, rising unemployment is likely to limit appetite for borrowing at a time when the household debt burden is already exceptionally high.”

He notes that household debt hit a record-high of around 200 per cent of disposable income last year and 22 per cent of households think paying off debt is the wisest way to use their savings.

“All told, we expect house prices to peak in Q2 and then fall by 5-10 per cent,” he says.

3.14pm: Who’s notching gains year-to-date?

The coronavirus crisis has hammered Australia’s share market but there are a handful of companies that have managed to thrive despite the turmoil and lockdowns.

Shares in Auckland-based Fisher & Paykel Healthcare is up nearly 30 per cent since the start of the year and 11 per cent on the month as it ramps up manufacturing output.

“As an essential service, we are continuing to focus on meeting the global demand for our respiratory products that are directly involved in treating patients with COVID-19,” managing director and chief executive Lewis Gradon said on Monday.

IGA supplier Metcash’s shares meanwhile have gained 24.5 per cent on the year and 29.5 per cent this month as consumers stockpile toilet paper and other basic products.

Coles is up 6.7 per cent on the year and 11.2 per cent on the month, and while rival Woolworths’ shares are down 3.0 per cent since the start of 2020, but have performed far better than the 27.6 drop suffered by the ASX200 during that time.

“The trend towards cooking at home, of course working at home, has seen the staples sector shine,” said Bell Direct market analyst Jessica Amir. “Sales are up dramatically.”

Gold miners Silver Lake Resources, Saracen Minerals, Evolution Mining, Gold Road Resources and Northern Star are all up between 1.5 per cent and 15 per cent as the price of the safe haven asset has hit seven-year highs during the crisis.

AAP

Gerard Cockburn 2.56pm: Grocery spend estimates conservative: UBS

UBS has retained a “buy” rating for Woolworth shares, believing increased panic buying will bring forward sales growth.

The brokerage has set a 12 month target price of $39.70 per share, with WOW stock currently trading at $35.31 at 12.20pm.

Its analysts have also predicted that the group’s hotel division is likely to incur a loss of $89m for the second half of the current financial year, due to closures caused by the coronavirus lockdown.

UBS is expecting March quarter sales to increase by approximately 13 per cent, while the following June quarter is expected to see a rise of around 6.5 per cent.

“We continue to believe our forecasts in grocery could prove conservative, with the closure of restaurants / hotels likely to see a further, prolonged transfer of sales to grocery / liquor sales,” its analysts said.

2.51pm: Lack of conviction in today’s rally: RBC

There’s been a “massive lack of conviction” in the Australian sharemarket today, according to RBC Capital Markets head of equities, Karen Joritsma.

That’s bourne out in the price action as the S&P/ASX 200 pared most of its 6.1pc intraday rise to a 4-day high of 5024.5 today.

The S&P/ASX 200 is up a relatively skinny 1.5pc to 4807 this afternoon as S&P 500 futures fall 1.5pc and Asia gains about half of what futures projected.

On the positive side she says it “feels like we are at the end of the quant fund selling which should temporarily halt this death spiral the market has been in”. But there’s been a “massive lack of conviction in the bounce today from both the sales desk and insto investors alike”.

Portfolios are “being moved around to avoid risk and looking for potential blow ups” but it’s “starting to smell like a case of 2009 again with capital raisings coming thick and fast.”

Cochlear used a “clever first mover advantage” in launching an emergency $850m capital raising at a 17pc discount after flagging a “significant impact” from coronavirus.

“Feedback from investors suggests this will be easily digested by a market with plenty of cash on the sidelines looking for a high quality home,” Ms Joritsma says.

“Portfolio managers and bankers alike running the ruler over balance sheets across the index looking for who goes next (and the) message from the fundies is clear, better to go big and not have to ask twice.”

Mr Joritsman says she “wouldn’t assume the big end of town are safe, the Aussie banks were propping up the dividends previously with DRP’s so we are about to find out just how committed they are to their payout ratios”.

2.18pm: Property risk ‘not yet alarming’: S&P

Downside risks to Australian property prices are “not yet alarming” for Australian banks, according to S&P Global Ratings.

But “risks to property prices, and to the banks from their home loans, are firmly on the downside,” it says.

“We expect that despite low interest rates, demand for housing should remain subdued in the short term due to the current travel restrictions, weak consumer sentiment, and the wealth effect that comes with falling asset prices,” the ratings agency says.

“In our opinion, the combination of high household debt and house prices exposes the Australian banks to a scenario of a sharp correction in property prices, especially in the economic conditions weakened by COVID-19 outbreak.

“Although outside our current base case and economic forecasts, a more severe and prolonged economic downturn could precipitate such a scenario, which would trigger credit losses significantly above our current estimates, and consequently weaken the creditworthiness of the Australian banks.”

Bridget Carter 2.16pm: Citi real estate analyst to exit

DataRoom | Citi real estate and infrastructure equities analyst David Lloyd is joining Australian fund manager Aubsil.

Mr Lloyd will work at Ausbil as an investment analyst, covering real estate and other sectors and will leave investment bank Citi to start his new role next week.

Prior to joining Citi as a director in 2017, Mr Lloyd worked at Morgan Stanley from 2014 to 2017 as an executive director and CBA as a senior equities analyst from 2009 to 2014.

He was also an equities analyst at Goldman Sachs from 2006 to 2009.

Lilly Vitorovich 1.50pm: Postponed Olympics saves Seven $70m

Seven West Media has backed the International Olympic Committee’s long-awaited decision to postpone the Tokyo Olympic and Paralympic Games until next year because of the coronavirus, which is expected to save the debt-laden television broadcaster about $70m.

“While we are just as disappointed as anyone with the postponement of the Tokyo Olympics and Paralympics, the health and safety of the athletes, officials and spectators is paramount, which is why we absolutely support the decision taken by the IOC,” Seven boss James Warburton said in a statement on Wednesday.

Seven - which was betting the Olympic Games would deliver strong TV and streaming audiences, plus a boost in advertising revenue before the COVID-19 pandemic - said it’s committed to working with its partners and supporters of the Games in light of the decision.

The comments come a day after The Australian reported that the Kerry Stokes-controlled company had met with its bankers before dumping its annual earnings guidance on Tuesday, but the lenders showed no interest in taking control.

Bridget Carter 1.44pm: Healius at risk of raising equity

DataRoom | Healius might be completing 2500 COVID-19 tests a day, but it is not enough to offset less GP attendances, the deferral of elective pathology work and a decline in the demand of non-essential radiology services, say analysts at Credit Suisse.

The analysts add in a research note they believe there is a possibility that the healthcare provider will raise equity as it remains at risk of breaching its debt covenants.

It comes after Healius, which recently rebuffed a $2.1bn takeover bid by Partners Group equating to $3.40 per share, on Tuesday told the market that its routine services had declined and it was experiencing increased consumable costs.

The company said while undertaking 2500 daily tests in its labs for COVID-19, it was reviewing non critical activities to reduce its cost base.

Analysts at Credit Suisse are estimating a 15 per cent decline in sales during the fourth quarter of the 2020 financial year due to a strong deterioration in high margin anatomical pathology.

This would be partially offset by above historical growth in microbiology, basic chemistry and hematology.

1.02pm: ASX halves daily gain

Australia’s S&P/ASX 200 has now pared half of its 6.1pc intraday rise in less than 3 hours.

It highlights the point that such strong jumps in global markets as seen Tuesday/Monday are by no means healthy.

It’s no surprise that the last time the S&P 500 rose 9.4pc was in the middle of the GFC. It smells of GFC 2.0.

The massive intraday fade in the ASX is consistent with the Nikkei is up just 5pc vs 10c projected by futures. While a further 3pc retreat today seems impossible, anything is possible these days.

A close in the red would dash the chance of the ASX achieving its first two-day gain in 6 weeks.

Even the most stubborn bulls with heads in the sand would have to take notice if it closes down.

Here’s the biggest movers at 1pm:

12.54pm: Check Macquarie’s best recovery ideas

Macquarie has listed its “best long ideas” in Australian shares from 14 of its analysts, including quality names that should rebound ahead of the market recovery, and multiple offshore earners that benefit from the weak Australian dollar.

“With Australian stocks already down over 30 per cent in just over a month, investors are increasingly asking what they should buy for the inevitable recovery from this Coronavirus crisis,” says Macquarie’s Australian equity strategist, Matt Brooks.

“The scenario we gave the team was that Australia has a downturn in CY20, but the impact of Covid-19 is limited to this calendar year (and) the fading Covid-19 headwinds plus fiscal/monetary stimulus then support a recovery in the economy in CY21.”

Macquarie analysts were also to find companies where the balance sheet is relatively resilient to weather the challenges in Calendar 2020. Thus the stocks chosen were typically the higher quality names in their sectors and are typically among the first to rebound when the market recovers, according to Mr Brooks.

The best ideas include a number that could be considered global leaders and could therefore be attractive to both domestic and international investors.

These global leaders are Aristocrat, Amcor, Cochear, Fortescue Metals, Goodman, REA Group and Transurban.

Except for Transurban, all are offshore earners which will benefit from the low Australian Dollar. Others with overseas earnings include Harvey Norman, Northern Star and VN, NST and Pushpay.

“This note is not about calling the bottom,” says Macquarie’s Mr Brooks. “It’s about highlighting a group of quality stocks that investors could start to buy now, acknowledging that even the best investors rarely invest all their money at the bottom.

“Investors can also change their portfolio to allocate more to one or more of the stocks we highlight.”

Max Maddison 12.49pm: InvoCare leads decliners

Funeral service provider InvoCare’s shares have plunged by 15 per cent after the company announced it would be forced to cut back capital expenditure in response to the extension of restrictions implemented by the emergency national cabinet.

Prime Minister Scott Morrison’s new COVID-19 measures limit the number of people allowed at funerals to a maximum of 10, forcing funeral directors to radically change the way funerals are run and to find ways through which mourners can attend from a distance.

In an ASX announcement, InvoCare CEO Martin Earp said the company was focused on implementing a “series of contingency plans”.

“The current restrictions issued by the federal and state governments on social distancing will affect our ability to offer a full range of services to our client families,” Mr Earp said.

12.20pm: Health declines as elective surgery halted

Today’s rally is losing steam after the government put a block on elective surgery to free up hospital capacity for coroanvirus treatment, and as US futures turn lower.

The local market had surged as much as 6.1 per cent in early trade, but is now holding a more moderate 3.5pc higher at 4900.1 as health care stocks tip into the red.

It comes as Scott Morrison suspended all elective surgeries which do not need to be done for 90 days.

Adding to that, the death of a teenager in California has spooked US markets, fuelling concerns the spread there is picking up speed.

S&P futures are now in the red, after adding 0.9pc earlier.

Follow all the virus updates in our Coronavirus Crisis live blog

Richard Ferguson 12.13pm: Ex-Fortescue boss leads virus commission

Former Fortescues Metals chief executive Neville Power will lead a new business-focused government body, known as the COVID-19 Coordination Commission.

“Australia right now more than anything needs to focus on minimising and mitigating the impact of the coronavirus on our businesses, on our communities, on our people. “ Mr Power said in Canberra.

“My role is going to be looking for those problems and looking for opportunities where we can join businesses together to solve problems. Where there is a workforce that is no longer gainfully employed and where there is a workforce that’s needed.

“Where there’s equipment that can be redeployed. Where we need to intervene to protect our critical supply chains and our utilities. And also, very importantly, looking to the future because we know that this virus will come and go.”

Former Labor minister Greg Combet, ex-Finance Department secretary Jane Halton, former Toll chief executive Paul Little, and Energy Australia chief executive Catherine Tanna will make up the COVID-19 Coordination Commission board.

Former Telstra chief David Thodey will be Mr Power’s deputy. Department of Prime Minister and Cabinet secretary Philip Gaetjens and Department of Home Affairs Secretary Mike Pezzullo will also sit on the board.

Coordinator Commissioner for COVID19 Neville Power during a press conference at Parliament House in Canberra. Picture: Gary Ramage.

Glenda Korporaal 12.01pm: ASX delays blockchain rollout

The COVID-19 crisis has forced the ASX is to suspend its planned start of its blockchain based replacement for its CHESS clearing system which was due to go live in April next year.

The ASX announced today that it is postponing the start date because of the “uncertainty created by the unfolding COVID-19 pandemic”.

The ASX said it would go ahead with its plans to test the system from July this year but it said that it would delay the “go live” date scheduled for April 2021 because of difficulties in consulting with users over the next few months.

“In the light of recent events, the ASX is replanning the implementation of CHESS replacement system,” ASX deputy chief executive officer Peter Hiom said today.

Perry Williams 11.56am: FAR ‘compromised’ by oil drop

Junior explorer FAR Ltd has signalled a possible delay and spending cuts on the $US4.2bn ($7.1bn) Senegal oil venture run by Woodside Petroleum and warned talks with its lenders have been “materially compromised” by the oil price crash and coronavirus fallout.

FAR owns a 15 per cent stake in the offshore Sangomar development which is operated by Woodside and aims to become the first oil project in the West African country, delivering 100,000 barrels a day of oil from early 2023.

However, FAR said market conditions meant it was now working with Woodside on a review of the project including cutting costs and delaying spending and how those decisions may change the timeline for first oil.

“In the current oil price and economic environment, FAR is working with the operator, Woodside, and our joint venture partners to explore and evaluate all options to preserve and enhance the value of this world class development,” FAR said. “Further details will be announced upon completion of the review, however, it will include how the costs can be reduced, expenditure delayed or both and any impact on the timeline to first oil.”

Australian energy companies have been scrambling to cut spending and defer planned projects in response to the oil rout which has seen prices fall by more than half to $US27 a barrel. Woodside has yet to update the market on its plans to reduce spending.

Eli Greenblat 11.46am: Restaurant Brands shutters NZ stores

Restaurant Brands NZ, the ASX-listed company that has fast food chains such as KFC and Pizza Hut across Australia, New Zealand and the US has announced all stores in New Zealand will be closing with effect from today.

148 stores across the company’s KFC, Pizza Hut, Carl’s Jr. and Taco Bell brands in New Zealand will remain closed for at least four weeks, the company said.

Meanwhile, its 63 KFC and two Taco Bell stores in Australia will continue to trade on a limited basis through take-out, delivery and drive-through channels. All dine-in operations have been closed. This situation is under review pending a decision by Australian government agencies.

The Hawaiian business (74 Taco Bell and Pizza Hut stores) also continues to trade through take-out, drive-through and delivery channels, although two mall stores in Guam have closed completely in accordance with local government instructions.

“The adverse impact of the store closures on this year’s trading results will be significant, but the company remains well funded under its current banking arrangements and expects to be able to ride out any disruption to the business.

“An update will be provided on future profit impacts once more trading information is known.”

Gerard Cockburn 11.27am: Anchor tenants to support SCA Property

Commercial landlord SCA Property Group has withdrawn its 2020 financial year earnings guidance, as coronavirus continues to place shopping centre rents under a shroud of uncertainty.

The group noted all but one of its 85 shopping malls are anchored by a large supermarket chains, and are currently benefiting from stronger foot traffic as consumers stockpile essential goods.

SCA said it is relying on anchor tenants to partially offset the forced government closures of non-essential businesses, including gyms, cinemas, massage and beauty parlours.

The closure of these tenants represents approximately $1m of monthly gross rental income for the property group, while café and restaurant closures represent $0.7m of monthly gross income.

“The impact on our FY20 earnings from any rental lost from these (specialty) tenants is expected to be partially offset by increases in percentage rent from our anchor tenants, interest expense savings and cost savings,” the company said in a statement to the ASX.

SCP shares last traded up 8.8pc to $2.36.

Bridget Carter 11.22am: Citi, JPM join Qantas debt offer

DataRoom | Investment banks Citi and JP Morgan have emerged as among the syndicate of banks providing $1.05bn of debt to the country’s national carrier Qantas.

It is understood that a large number of banks, including aviation lenders, are involved with offering the loan designed to offer the carrier more liquidity during the Coronavirus outbreak.

Qantas told the market Wednesday that the debt is being secured against part of the group’s fleet of unencumbered aircraft, which were brought with cash in recent years.

The loan has a tenure of up to ten years at an interest rate of 2.75 per cent.

It takes Qantas’ cash balance to $2.95bn with an additional $1bn of undrawn debt available.

Qantas said the group’s debt remains at the low point of its target range at $5.1bn, with no major debt maturities until June next year.

Michael Roddan 11.19am: Perpetual halts corp credit trust plans

Australian fund manager Perpetual has hit the pause button indefinitely on a dividend reinvestment plan for its $500m high-yield corporate credit trust after shares in the junk bond investment vehicle sunk below net tangible assets.

It’s the latest disruption to the under pressure corporate credit investment market, which is troubling money managers with steep increases on exit fees -- known as “sell spreads” — of up to 2000 per cent, liquidity issues plaguing trading and a mammoth sell-off.

Shares in the Perpetual Credit Income Trust have fallen almost 40 per cent since late February, as credit markets are rattled ahead of an expected wave of corporate defaults triggered by government shutdowns in major economies and the oil price crash.

The net tangible asset backing Perpetual’s trust is about $1.06 per share.

But shares in the Trust hit a low of 66c on Monday, only to recover to change hands currently at just under 80c a share.

In normal circumstances, shares generally trade in line with the net tangible asset value backing the fund.

11.16am: Shares trim early surge

So much for the end of the bear market.

The Australian sharemarket is rapidly paring a massive intraday gain.

The S&P/ASX 200 is up 4.1pc at 4931 after rising 6.1pc to a 4-day high of 5024.5.

It comes as S&P 500 futures swing from up 0.9pc to down 0.7pc.

US futures seem disappointed that the White House is only considering a 3-month deferral of tariffs, rather than a complete withdrawal.

Eli Greenblat 11.09am: Sigma crashes to $12.3m loss

Healthcare and pharmacy group Sigma has crashed to a full-year loss of $12.33m, a swing from a profit of $36.52m in the 12 months to January 2019, following the loss of its multi-billion dollar contract with the giant My Chemist and Chemist Warehouse retail group, and costs linked to transforming the business.

Revenue for the year fell 18 per cent to $3.244 billion.

The pharmacy group has reported a strong uplift in demand in the wake of the coronavirus pandemic, as consumers rush pharmacies for medicines and supplements, but given the uncertainty around the health crisis it is not providing earnings guidance for 2020.

There will be no final dividend for shareholders and the interim dividend for 2020 is also on hold. However the pharmacy supplier believes the hard work done to resurrect its business in the midst of a tough retail environment is starting to show results.

SIG shares last down 2.1pc to 68.5c.

Damon Kitney 10.50am: Star Entertainment stands down 8000 staff

The Star Entertainment Group Has stood down 90 per cent of its 9000 staff, including senior management, as it follows the lead of Crown Resort and SkyCity Entertainment by closing its gaming floor, food and beverage and conference facilities at its Sydney, Gold Coast and

Brisbane properties.

Staff will receive two weeks of paid pandemic leave while they will be able to access any accrued annual and long service leave entitlements.

The board and senior management will also forego a significant percentage of entitled directors’ fees and salaries.

Chairman John O’Neill AO said: “This is a unique environment and one beyond our control in which we’re determined to balance the necessary measures needed to protect the business while considering the considerable human impact to our workforce.”

Managing Director and Chief Executive Officer Matt Bekier said: “We have incredible people at The Star and huge potential. We are also confronting, like the rest of society, an unprecedented challenge in the COVID-19 situation.”

Star said the shutdown of the casino properties would have a material impact on The Star’s operations.

Still, Star Entertainment shares are joining today’s rally, last up 11.5 per cent to $1.62.

10.47am: Tech, travel names back in favour

Battered tech and travel names are leading the march higher as stocks trade at their best levels in four days.

Sector-wise materials, technology and industrial sectors have outperformed so far, but Credit Corp - the debt collector that had taken a 72pc tumble for the month - is a standout with a 40.4 per cent lift so far to $12.80. Still, that’s only a 5-day high for the stock, with plenty of ground still to make up.

Afterpay too is taking a stride higher, up 31pc to $14.72 while Qantas is higher by 27.4pc to $3.30 - at the start of the year it was trading at $7.16.

Corporate Travel Group is notching gains of 22.5pc to $9.26.

10.35am: Early rise but fundamentals still in question

The fact that the index actually rose as much as expected for a change was encouraging.

If it manages to hold some of its rise today it will be the first two-day rise in five weeks.

But with the 12-month forward PE ratio now back up to 13.55 times - just a few per cent below the long-run average around 14 times, investors may question whether this is enough of a discount for the kind of recession the world is facing.

The risk to consensus earnings estimates is being demonstrated every day by a mass withdrawal of earnings guidance. Any slippage back below the 5000 “round number” from this point could bring in more selling.

Joyce Moullakis 10.28am: Bendigo Bank cuts rates

Bendigo and Adelaide Bank has unveiled interest rate cuts across some business and home loan products, six days after the Reserve Bank’s emergency 25 basis point cut.

Bendigo on Wednesday said it was reducing business loan variable rates by 100 basis points for residentially-secured business loans, and 75 basis points for non-residential and unsecured business loans.

The bank also cut small business fixed rate loans by up to 82 basis points, depending on the term and security of the loan.

The RBA announced an emergency rate cut last Thursday – an out of cycle reduction to help shield the economy from the COVID-19 pandemic – and its fifth cut since June.

“Our commitment to our customers and their communities has always been to support them through both the good times and tougher times. Small businesses are the engine room of our economy, employing millions of our fellow Australians and their success feeds into everyone’s success,” said Bendigo’s chief executive Marnie Baker.

BEN shares are higher by 5.5 per cent to $5.77 in early trade.

Lilly Vitorovich 10.23am: Southern Cross suspended to weigh virus hit

Southern Cross Media has become the second Australian media company to request a voluntary suspension to allow the owner of Triple M and Hit Network radio stations more time to assess the damage of the coronavirus crisis on its business.

The company said the suspension was “necessary” to enable it to continue to review the impact of the COVID-19 crisis on its business and the “actions being taken” to address by management to address them.

Southern Cross expects that the suspension will be required until the start of trading on the Australian Securities Exchange on April 3.

The request comes two days after Southern Cross requested a trading halt to review the coronavirus impact on its operations.

Media companies are expected to see a drop in advertising revenue as companies scale-back ad and marketing spending during the health and economic crisis.

10.16am: Stocks surge 6pc

The local market has surged by 6 per cent in early trade, following a strong US lead after progress on debate of the country’s $US2.5 trillion stimulus package.

The benchmark ASX200 hit four-day highs of 5024.5, a 6pc or 281 point rise.

All sectors are trading higher, led by an 8.4 per cent surge in tech names and as miners add 7.8pc.

Gerard Cockburn 10.03am: Qantas secures further $1.05bn debt

Qantas has upped its liquidity by securing $1.05bn in debt funding, in an attempt to manage operations through the coronavirus outbreak which has seen it halt international flights and slash its domestic capacity.

The debt has been secured against part of the Group’s fleet of unencumbered aircraft, which

were bought with cash in recent years. The loan has a tenure of up to 10 years at an interest rate of 2.75 per cent.

“Everything we’re doing at the moment is focused on guaranteeing the long term future of the national carrier, including making sure our people have jobs to return to when we have work for them again,” Qantas chief executive Alan Joyce said.

The funding takes teh group’s available cash balacne to $2.95bn with an additional $1bn undrawn facility remaining available.

Eli Greenblat 10.01am: Retail woes slice Reject Shop raise by 62pc

The coronavirus pandemic and the savage impact it is having on the retail sector has decimated The Reject Shop’s $25m capital raising, with the chain only raising $9.5m from the shareholder offer to produce a shortfall of $15.6m or 62.2 per cent.

But it has also put a rocket under its sales as people panic buy toiletries, health and personal products that has seen The Reject Shop book sales growth as high as 36 per cent in a single week.

Priced at $2.70 per share, the rights offer was fully taken up by The Reject Shop’s biggest shareholder, packaging millionaire Raphael Geminder, while the shortfall will now be placed with sub-underwriters.

Meanwhile, The Reject Shop updated the market on its trading performance and said in the last four weeks it has experienced a material increase in sales driven by customer concerns around coronavirus.

It said comparable sales for the first twelve weeks of the second half of fiscal 2020 now sit at up 8.2 per cent. Just two weeks ago the group said comparable sales for the first eleven weeks of the second half were up 5.7 per cent.

Comparable sales for the week between 16 March to 22 March 2020 were up 36.1 per cent. This was again driven by strong category performances in groceries, cleaning, toiletries and pet care.

The Reject Shop says its sales have surged as customers panic buy key household goods. Pictdure: AAP/ Matthew Vasilescu.

9.55am: Wesfarmers winds back NZ services

Perth-based conglomerate Wesfarrmers has closed its Kmart and partially closed its Bunnings stores in New Zealand to meet with new government directives on limiting social interaction in the wake of the coronavirus pandemic.

The group’s 53 Bunnings locations will remain open for trade customers while its industrial and safety business in the country will also continue operations.

In a note to investors, it said Kmart stores in NZ represented less than 3pc of group revenues, with all operations in the country accounting for approximately 8pc of total annual revenue.

The group said its Australian stores continued to operate under standard or near-standard trading hours, and reassured investors it would pay its previously declared full-franked interim dividend of 75c per share on March 31.

Ben Wilmot 9.51am: Charter Hall stands firm on guidance

Beaten down property funds manager Charter Hall has signalled it will defy concerns about the coronavirus and reaffirmed its sector leading earnings guidance as it was also paid a major performance fee.

The company’s business has come under stress as its share price has fallen further than rival listed property groups that focus on owning buildings rather than managing funds.

In boom times that gave Charter Hall a lucrative fee stream, it became a sector star as a deal making colossus, topping growth and return measures as it grew to an empire of about $40bn. But that has halted as major commercial property transactions have all but frozen and the company’s expansion appears to be on hold.

It gave little sign of pessimism on Wednesday morning announcing that it would hit previously stated guidance making it just about the only major property company to stick by its forecast.

Mall owners including Scentre Group and Vicinity Centres have already abandoned their guidance as have listed diversified companies including the GPT Group, Stockland and Mirvac, with the latter two also exposed to residential development.

Two Charter Hall satellite funds have also taken their guidance off the table for the moment. The two funds, that own supermarkets and the childcare centres, made the move earlier this week. However, the company’s specialist long lease property trust kept its guidance.

9.42am: ASX to surge, more raisings ahead

Australia’s sharemarket is poised to surge as much as 6pc at the open but remains extremely volatile and vulnerable to a renewed selloff as the global COVID-19 crisis worsens.

Overnight futures relative to fair value suggest the S&P/ASX 200 will open up 6.1pc at a 4-day high near 5025 after the S&P 500 rose 9.4pc to 2447.3, while the Dow took its biggest jump since 1933.

Risk assets might be supported again by expectations that a proposed US fiscal stimulus of at least $US2 trillion ($3trillion) will pass imminently. There’s also lingering optimism that fear has peaked as US President Trump calls for quick restart of the economy and the Fed has started unlimited QE.

It is worth noting however that such strong gains in recent days have usually been followed by equally sharp falls.

Indeed, a 9.4pc rise in the S&P 500 isn’t healthy. It was the biggest rise in October 28th 2008, but the market didn’t bottom in the GFC until March 2009. Thus, while yesterday’s close above the 2016 low at 4707 was encouraging, the index might exhaust of its potential short-term rebound in a day.

Still, if the index can stabilise above the 5000 “round number”, traders will look to the 38.2pc Fibonacci retracement of the Feb-March fall - at 5470.

Meanwhile the withdrawal of earnings guidance continues unabated, with Fletcher Building and Reliance Worldwide the latest to do so in Australian market. Deeply discounted equity capital raisings are just getting underway, with Cochlear announcing a $800m raise at a 17pc discount, after withdrawing earnings guidance.

The success of Cochlear’s capital raise may be something of a litmus test for the market. In the GFC, the market didn’t bottom until many more companies raised equity.

Gerard Cockburn 9.34am: Nufarm trebles losses before virus hit

Agricultural chemical company Nufarm has posted a half yearly loss noting earnings are likely to be generated in the second half of the financial year, despite coronavirus creating an uncertain outlook.

The company booked a net loss of $160m for the first six months of the 2020 financial year, more than three times that of the previous year’s interim result, which stood at a loss of $53m.

Its underlying earnings before interest, tax, depreciation and amortisation also slipped by 111.6 per cent compared to the previous corresponding period to a loss of $5.6m.

The company said COVID-19 had spurred volatility within global markets and was impacting exchange rates for exported products, making it difficult for hte group to make projections of its financial performance.

“Future demand and the company’s ability to meet demand could be impacted by an escalation in disruptions,” the company said in its half yearly report.

“Product supply from China is progressively recovering from the initial delays caused by COVID-19. While regional restrictions are creating distribution delays and upward cost pressure in some countries, the impacts have been manageable.”

Nufarm noted the earnings loss had been driven by a demand decline in North America and Indonesia, where revenue from operating conditions fell by approximately 12 per cent due customers experiencing poor weather conditions. It also noted weaker demand in the Australian market which has been caused by continued drought reducing sales for summer crops.

According to Nufarm, the decline was partially offset by increased revenue in European markets.

Total revenue for the first six months to December 31, 2019 stood at $901m, a decline of 12 per cent compared to $1.02bn in the previous corresponding period.

NUF last traded at $4.22.

Nufarm facility in Laverton North. Picture: Yuri Kouzmin.

9.24am: Pharmacy demand surges 50pc: API

The listed owner of Priceline Pharmacy chains says demand for medicines has surged by more than 50 per cent this month as consumers stockpile health products in the wake of coronavirus shutdowns.

In an update to the market, Australian Pharmaceutical Industries said its community pharmacy network had experienced “unprecedented demand” in the month to date.

“You may recall that we put in place measures and contingencies during the bushfire emergency that ensured the delivery of vital medicines in fire-affected areas,” the company said.

“This emergency is on a far greater scale and we are working very closely with the Government and suppliers to ensure the ongoing supply of medicines for the community.”

Despite that, it said the fluid situation meant it could not provide profit guidance for the second half.

“We are experiencing improved like-for-like sales throughout our Priceline Pharmacy

network, but we cannot predict how long that will continue. We do know that Priceline

Pharmacies are highly likely to remain open throughout the entire emergency due to their

essential role in healthcare.”

Eli Greenblat 9.12am: Domino’s closes all NZ stores for 4 weeks

Domino’s Pizza has announced all its stores in New Zealand will be closed for a period of 4 weeks starting tomorrow in wake of the coronavirus pandemic.

The company said it is responding to quickly implement new operational methods including changes to transition to more delivery orders and reduce cash payments through ‘Zero Contact’.

Domino’s is observing an increase in delivery orders and is hiring more drivers in all regions, the company said, and its balance sheet remains strong and the company had significant headroom in its committed facilities and covenants.

Chief executive Don Meij said the company respected the clear decision of the New Zealand government.

“While we believe we can safely serve our communities during this crisis, we’re also members of the community ourselves. We respect governments around the world are responding to conditions that are unique to each country.”

The move comes after the chain shuttered its stores in France - with some set to reopen after a 15-day closure as decided by local franchisees.

9.04am: Millers, Katies stores shuttered

Womenswear retailer Mosaic Brands will close all of its stores from Thursday and stand down all retail staff, saying the group’s personal service mandate conflicted with the government’s social distancing recommendations.

The group, which owns nine brands including Millers, Rockmans, Rivers and Katies, said store traffic and revenue had already been significantly reduced as a result of restrictions to stem the spread of coronavirus.

The company employs 6800 staff, many in its retail stores, though its online operations will continue while stores are closed.

“All team members affected by the store closures will be stood down with access to leave

entitlements while the Group reviews government support schemes that may be available to

them,” the company said.

“The Group is working with its business partners and is reviewing its cost of

doing business, with a view to reducing costs to match expected revenue.”

8.58am: What’s on the broker radar?

Adairs cut to Neutral - Goldman Sachs
Aurizon raised to Buy - UBS
Domino’s Pizza cut to Hold - Morningstar
Evolution raised to Overweight - Morgan Stanley
Fortescue raised to Equalweight - Morgan Stanley
GrainCorp cut to Hold - Bell Potter
Healius raised to Buy - Citi
IVE Group cut to Hold - Shaw and Partners
Iluke ariased to Overweight - Morgan Stanley
Independence Group raised to Overweight - Morgan Stanley
Integral Diagnostics raised to Buy - Jefferies
Magellan raised to Buy - Citi
Newcrest raised to Buy - Citi
OZ Minerals raised to Overweight - Morgan Stanley
Transurban raised to Neutral - Credit Suisse

Bridget Carter 8.45am: Cochlear halted for $800m raise

DataRoom| Medical device company Cochlear has entered a trading halt as it prepares for an equity raising worth about $800m.

Working on the raise is JPMorgan, which is also fully underwriting the deal.

Shares are being sold at $140 each which is a 16.7 per cent discount to their last closing price of $168.

The funds are being used to shore up the balance sheet and provide liquidity amid the corona virus crisis.

It comes as Webjet and oOh! Media make efforts to raise equity at discounts of more than 40 per cent to their last traded share prices.

8.27am: Virgin to stand down 8000 workers

Virgin Australia has stood down about 8,000 of its 10,000 workers until at least the end of May and further slashed domestic flight capacity in the wake of coronavirus border restrictions.

The company this morning extended its domestic capacity cuts from 50pc to 90pc, as the coronavirus pandemic continues to hammer the airline industry.

The move includes the suspension of Tigerair Australia domestic services effective immediately.

Virgin has already halted all international services.

The new move will involve the temporary grounding of 125 aircraft.

Virgin says 10 per cent of domestic capacity will be retained for transportation of essential services, critical freight and logistics.

Bridget Carter 8.24am: Cochlear prepares for raising

Cochlear has entered a trading halt as it prepares for an equity raising.

Working on the raise is JPMorgan, which is also fully underwriting the deal.

More to come

7.30am: Dow’s best day since 1933

The Dow Jones Industrial Average surged to its best day since 1933 as Congress and the White House neared a deal on Tuesday to inject nearly $US2 trillion of aid into an economy ravaged by the coronavirus.

The Dow burst 11.3pc higher, while the more closely followed S&P 500 index leapt 9.4pc as a wave of buying around the world interrupted what has been a brutal month of nearly nonstop selling. Despite the gains, investors were far from saying markets have hit bottom. Rallies nearly as big as this have punctuated the last few weeks, and none lasted more than a day.

Both Democrats and Republicans said they’re close to agreeing on a massive economic rescue package, which will include payments to US households and aid for small businesses and the travel industry, among other things. A vote in the Senate could come later Tuesday or Wednesday, US time.

Investors have been waiting in frustration for such aid, particularly as the Federal Reserve has done nearly all it can to sustain markets, including its latest round of extraordinary aid launched Monday.

“I don’t think there’s any more confidence in the fundamental outlook, but the fact that we’re making progress is good news,” said Katie Nixon, chief investment officer at Northern Trust Wealth Management.

“It’s sort of like, keep the patient alive in the emergency room so you can provide some treatment options.”

The Dow rose 2,112.98 points, its biggest point gain in history, to 20,704.91.

The S&P 500, which is much more important to most 401(k) accounts, rose 209.93, or 9.4pc, to 2,447.33 for its third-biggest percentage gain since World War II.

The Nasdaq composite jumped 557.18 points, or 8.1pc, to 7,417.86.

The buying circled the world. South Korean stocks surged 8.6pc, Germany’s market jumped 11pc and Treasury yields rose in a sign that investors are feeling less fearful.

The market has seen rebounds like this before, only for them to wash out immediately. Since stocks began selling off on February 20, the S&P 500 has had six days where it’s risen, and all but one of them were big gains of more than 4pc. After them, stocks fell an average of 5pc the next day.

“One of the things to be careful about is thinking this will be the panacea or that this fiscal response will be sufficient,” said Eric Freedman, chief investment officer at US Bank Wealth Management.

Ultimately, investors say they need to see the number of new infections peak before markets can find a floor.

7.35am: Copper bounces

Copper prices rebounded four per cent overnight on the back of a new wave of US economic stimulus and worries about supply due to the coronavirus, but analysts said the market’s gains were likely to be fleeting.

Industrial metals joined wider financial markets in rebounding after the US Federal Reserve offered unlimited bond buying, sending more dollar liquidity into the global economy.

Also supporting base metal prices were further virus-linked shutdowns in metal- producing countries, which will lead to lower mine output.

But independent consultant Robin Bhar said that the collapse in demand so far was sharply outweighing mine closures.

“Supply constraints are appearing, but all of Chile and central Africa would have to shut down to kick out enough supply of copper to match the potential fall we’re seeing in demand,” he said.

Three-month copper on the London Metal Exchange had gained four per cent to $US4,813 a tonne by 1700 GMT, on track for its biggest one-day gain since September 2018.

Reuters

7.30am: Oil rises modestly

Oil prices rose modestly on overnight but settled off the day’s highs as the coronavirus pandemic’s heavy toll on demand offset hopes for a forthcoming $US2 trillion US economic relief package.

India, the world’s third largest oil consumer, ordered its 1.3 billion residents to stay home for three weeks as of Tuesday, the latest big fuel user to announce restrictions on social movement that have destroyed demand for gasoline and jet fuel worldwide.

The oil market has been hit by twin shocks. The unexpected price war between Saudi Arabia and Russia has unleashed a flood of supply while the pandemic is on track to cut fuel demand by at least 10 per cent worldwide.

Brent futures rose 12 US cents, or 0.4 per cent, to settle at $US27.15 a barrel. US West Texas Intermediate (WTI) crude gained 65 US cents, or 2.8 per cent, to settle at $US24.01.

Reuters

7.20am: Dow surges 11.3pc on stimulus plans

Wall Street posted its best performance in nearly 90 years, as indices rallied on hopes that lawmakers would soon agree on a massive stimulus measures to blunt the coronavirus’ economic impact.

At the close, the Dow Jones Industrial Average had risen by 11.4 per cent to 20,704.91, its biggest one-day percentage increase since 1933.

The tech-rich Nasdaq gained 8.1 per cent to close at 7,417.86, while the broad-based S&P 500 finished the day at 2,447.33, a gain of 9.4 per cent.

AFP

7.15am: Bezos share sale spares losses

Top executives at US-traded companies sold a total of roughly $US9.2 billion in shares of their own companies between the start of February and the end of last week, a Wall Street Journal analysis shows.

The selling saved the executives -- including many in the financial industry -- potential losses totalling $US1.9 billion, according to the analysis, as the S&P 500 stock index plunged about 30 per cent from its peak on February 19 through the close of trading March 20.

By far the largest executive seller was Amazon.com chief executive Jeffrey Bezos, who sold a total of $US3.4 billion in Amazon shares in the first week of February, shortly before the stock market peaked, allowing him to avoid paper losses of roughly $US317 million if he had held the stock through to March 20, according to the Journal analysis.

7.05am: ASX to rally on stimulus hopes

Australian shares are poised to bounce almost six per cent amid a global rally on hopes of a US economic stimulus deal.

At 7am (AEDT) the SPI200 futures contract was up 278 points, or 5.9 per cent, at 4992 points, suggesting a huge surge as the market opens.

The local bourse rallied on Tuesday from a near eight-year low with the US Federal Reserve taking drastic action to shore up markets and new coronavirus cases seeming to plateau in Italy.

Overnight the US, European and Chinese stock markets also surged on hopes a massive US stimulus deal was close.

The Australian dollar was buying US59.31 cents at 7am (AEDT), from US59.39 as the market closed on Tuesday.

AAP

6.35am: Dow rallies 10pc on rescue deals

US stocks rallied on signs that lawmakers and the Trump administration were nearing a deal on a giant stimulus package aimed at limiting the economic fallout of the coronavirus pandemic.

The Dow Jones Industrial Average gained 1936 points, or 10.4pc, in afternoon trading. The S&P 500 climbed 8.9pc, while the Nasdaq Composite rose 7.6pc.

In Australia, markets bounced yesterday and are tipped to open strongly again, with the SPI futures index up 243 points at 6.35am (AEDT).

The Australian dollar was higher at US59.19c.

Overseas, European markets also rallied, with the pan-continental Stoxx Europe 600 advancing 8.4pc in its best one-day performance since 2008. Most Asian markets also closed higher, led by a 7pc jump in Japan’s Nikkei 225 gauge.

In Washington, Treasury Secretary Steven Mnuchin and Senate Minority Leader Chuck Schumer, who have led the negotiations for Republicans and Democrats, emerged from late-night negotiations saying they were within striking distance of a deal. Senate Majority Leader Mitch McConnell voiced hoped that a deal could get done later in the day. The stimulus package is expected to be worth at least $US1.6 trillion.

“Markets are definitely reacting to the prospects of a stimulus deal,” said Jason Pride, chief investment officer for private wealth at Glenmede.

A string of emergency measures by the Federal Reserve to support credit markets and ensure funding for American businesses and homeowners has also helped alleviate some of the most pressing concerns among investors.

Dow Jones

6.05am: UK baulks at airline bailout

The UK is baulking at a full-scale bailout of its airlines, telling British carriers to seek out private-sector remedies first and making clear the uneven hurdles the global aviation industry faces in finding ways to survive the fallout of the new coronavirus outbreak.

Airlines around the world have furloughed workers, cut pay and canceled flights -- some grounding nearly all of their flying capacity -- to weather a collapse in demand by travelers and a patchwork of travel bans by governments aimed at containing the spreading virus.

The International Air Transport Association said earlier Tuesday it now expects airlines to lose some $US252 billion in revenue this year -- more than double a worst-case estimate of $US113 billion given earlier this month. Air traffic is expected to drop 38pc for the year, the trade body said. It doesn’t expect a fast recovery.

Amid that crisis, governments are approaching assistance for the industry differently, making the contours of a path for a global recovery more difficult to see. Norway, Denmark and Sweden, for instance, have promised cash to national and regional carriers.

The French and Dutch governments have said they are prepared to do what is necessary to secure the survival of Air France-KLM. Germany’s Deutsche Lufthansa AG is in talks with Germany and the governments of other countries where its network airlines are based for similar financial support.

The US. Congress has been considering various proposals for how to aid airlines as well as other industries.

China, meanwhile, has subsidized some carriers to keep them providing some basic services.

The UK, home to carriers like British Airways and Virgin Atlantic, is so far going in a different direction. In a letter to airlines and airports on Tuesday, Rishi Sunak, the country’s Chancellor of the Exchequer, said the government is prepared to enter into negotiations with individual companies but only as “a last resort.”

Airlines are being encouraged to first pursue all other commercial avenues, including raising capital from existing investors or renegotiating payment terms with financial stakeholders, according to the letter.

Dow Jones

5.45am: Dow rallies 7pc on signs of deal

US stocks rallied on signs that lawmakers and the Trump administration were nearing a deal on a giant stimulus package aimed at limiting the economic fallout of the coronavirus pandemic.

The Dow Jones Industrial Average gained 1,403 points, or 7.5 per cent, in afternoon trading. It had been up nearly 10 per cent earlier, before paring gains. The S&P 500 climbed 6.1 per cent, while the Nasdaq Composite rose 5.1 per cent.

Overseas, European markets also rallied, with the pan-continental Stoxx Europe 600 advancing 8.4 per cent in its best one-day performance since 2008. Most Asian markets also closed higher, led by a 7 per cent jump in Japan’s Nikkei 225 gauge.

In Australia, markets bounced yesterday and are tipped to open strongly again, with the SPI futures index up 195 points at 5.45am (AEDT).

The Australian dollar was higher at US59.06c.

“Markets are definitely reacting to the prospects of a stimulus deal,” said Jason Pride, chief investment officer for private wealth at Glenmede.

At the same time, markets remain sensitive to reports of fresh outbreaks of the virus and the damage caused to the economy by measures to stem the contagion. Speculation about the breadth and depth of an impending global recession continue to weigh on investors.

“This is classic bear-market moves,” said David Coombs, head of multiasset investments at Rathbones Investment Management. “It doesn’t feel like there’s massive relief and confidence out there.”

Concerns about growth prospects have erased nearly 30pc of the value of the S&P 500 in recent weeks and left volatility in American stocks at historically high levels.

Some Wall Street analysts have stepped up discussions on whether the markets have hit bottom. Credit Suisse said in a research note that it expected the S&P 500 to hit 2700 by year’s end, which would imply a 21pc rebound from where it closed Monday.

The key to such a bounce would be tangible progress in battling the coronavirus pandemic, the bank’s analysts wrote. “Markets should quickly regain their footing once newly reported cases peak,” they wrote. “While entirely necessary, government relief efforts alone will not be enough to establish a market floor.”

Gold futures rose 5.9pc -- their best one-day performance since 2009 -- in a move that some investors saw as a return to normal market functioning. The price of the precious metal usually rises in times of uncertainty. But last week it fell amid a broad sell-off in assets as panicky investors dumped stocks, bonds and commodities in a rush for cash.

The demand for U.S. government bonds, which are seen as a haven when markets are in turmoil, also showed signs of easing. The yield on the 10-year US Treasury, which moves inversely to its price, rose to 0.842pc, from 0.763pc Monday, according to Tradeweb.

Futures on Brent crude, the global oil benchmark for oil, ticked up 0.4pc. Crude prices have plunged by more than half so far this year due to reduced energy demand and a price war between major oil-producing nations.

Dow Jones Newswires

5.45am: Trump weighs distancing scaleback

With lives and the economy hanging in the balance, President Donald Trump said Tuesday he is hoping the county will be reopened by Easter, as he weighs how to refine nationwide social-distancing guidelines to put some workers back on the job amid the coronavirus outbreak.

As many public health officials call for stricter, not looser restrictions on public interactions, Trump said he was already looking toward easing the advisories that have sidelined workers, shuttered schools and led to a widespread economic slowdown.

“I would love to have the country opened up and just raring to go by Easter,” he said during a Fox News virtual town hall.

The US is now more than a week into an unprecedented 15-day effort to encourage all Americans to drastically scale back their public activities. “I gave it two weeks,” Trump said during the virtual town hall from the Rose Garden.

He argued that tens of thousands of Americans die from the seasonal flu or in automobile accidents and “we don’t turn the country off.”

“We’ll assess at that time and we’ll give it some more time if we need a little more time, but we need to open this country up,” he added. “We have to go back to work, much sooner than people thought.”

President Donald Trump talks with host Bill Hemmer during a Fox News virtual town hall. Picture: AP

5.40am: Markets surge on Fed boost

World stock markets rallied strongly after the US Federal Reserve launched an unprecedented bond-buying plan, the latest salvo in a global counter-attack against the economic fallout from the coronavirus outbreak.

AxiCorp’s Stephen Innes called the Fed’s move “the most significant monetary experiment in the history of financial markets”.

Hopes that the US government is close to unleashing its own financial fireworks and G7 promises for massive help also helped push equities higher.

On Wall Street, the DJIA had gained close to 10 per cent by the late New York morning, a spectacular recovery from Monday’s rout, mirrored in Europe where Frankfurt’s Dax index managed a double-digit rise by the close.

London closed up 7.5 per cent, Frankfurt rose 11 per cent and Paris surged 8.4 per cent.

Grim survey data showing collapsing eurozone and UK business activity in March did not get in the way of Tuesday’s recovery, with Madden saying traders had been expecting the “brutal” survey data.

Meanwhile, investors gave a massive thumbs up to the US central bank’s pledge to essentially print money in a move not seen since the global financial crisis.

The dollar beat a retreat from Monday’s three-year peak against the euro on the Fed news.

The Fed, which has already slashed interest rates to record lows, said it will buy unlimited amounts of Treasury debt and take steps to lend directly to small- and medium-sized firms hammered by restrictions across the country.

But analysts could not bring themselves to call the day the end of the coronavirus market downturn.

“The positive reaction in stock markets since the Fed’s extraordinary policy announcement yesterday belies the fact that central bank actions have yet to quell the strains showing up across the global financial system,” said Oliver Jones at Capital Economics.

“It is hard to see a lasting recovery in equity prices until those strains subside,” he said.

Earlier Tuesday, equities in Asia rallied with Tokyo ending more than seven per cent higher.

The Nikkei was given extra lift by a Bank of Japan decision to embark on its own massive bond-buying scheme.

A weaker dollar helped lift crude, which has been hammered to recent multi-year lows on the back of a price war between producers Saudi Arabia and Russia.

AFP

5.35am: Congress closing in on aid package

Congressional and White House officials say a deal appears to be at hand on a nearly $US2 trillion measure aimed at easing the economic damage inflicted by the coronavirus pandemic.

Both Senate Majority Leader Mitch McConnell and the top Democrat, Sen. Chuck Schumer, said agreement appeared close.

“I don’t see any issue that can’t be overcome within the next few hours,” Schumer said.

“Last night I thought we were on the five-yard line. Now we’re on the two.”

Negotiators laboured in the shadow of what McConnell called “the most serous threat to Americans’ health in over a century and quite likely the greatest risk to America’s jobs and prosperity that we’ve seen since the Great Depression.”

Schumer said a key provision in the emerging package would provide for four months of salary for workers furloughed because of the pandemic.

“The federal government will pay your salary, your full salary,” he said, outlining aid that still is not final or approved by the full Senate. “For now, four months. We (Democrats) had asked for four months and four months looks like what we’re going to get when we come to this agreement.”

Senate Majority Leader Mitch McConnell. Picture: AP

5.30am: EU split over rescue plan

EU finance ministers are discussing special crisis measures to help European countries withstand the economic shock of the coronavirus outbreak, but powerful Germany is cautioning against unreasonable expectations.

The COVID-19 outbreak has brought the European economy to it knees and Italy, with the backing of France and Spain, wants a massive response from EU partners in a historic act of financial solidarity.

But northern countries, led by Berlin and the Hague, believe a huge stimulus by the European Central Bank, backed by national spending, is adequate for now.

At the heart of the split are deep doubts of northern and wealthier European nations about the financial discipline of southerners, especially since the dark days of the eurozone debt crisis.

Countries like France, Spain and Italy have long called for a eurobond, joint borrowing by the 19 members of the euro single currency that could serve as the bedrock of a more stable and unified European economy.

Italy backed by France recently renewed the call by asking for EU-wide “corona bonds”, but ahead of Tuesday’s talks, Germany angrily dismissed the return of the “eurobond” concept.

AFP

5.25am: Bombardier halts assembly

Bombardier said it will halt its aircraft and trains assembly lines in Canada after Quebec and Ontario ordered all non-essential businesses shut to stem the coronavirus pandemic.

The measure was to take effect at 11:59pm (0359 GMT Wednesday) and last until April 26, according to a statement.

“This suspension includes Bombardier’s aircraft and rail production activities in the provinces of Quebec and Ontario,” it said.

More than 12,000 employees, or 70 per cent of Bombardier’s Canadian workforce, will be placed on furlough during the temporary shutdown, spokeswoman Jessica McDonald told AFP.

The company in recent months announced deals to sell its trains and commercial aircraft divisions and use the proceeds to pay down massive debts.

AFP

5.22am: India orders lockdown

Indian Prime Minister Narendra Modi announced a “total lockdown” in the country of 1.3 billion people during a televised address night, the most extensive stay-at-home order yet in the world’s fight against the coronavirus pandemic.

The 21-day lockdown was set to begin at midnight.

“To save India and every Indian, there will be a total ban on venturing out of your homes,” Modi said, adding that if the county failed to manage the next 21 days, it would be set back by 21 years.

Indian health officials have reported 469 actives cases of COVID-19, the disease caused by the virus, and 10 deaths.

Pigeons fly at a deserted Gateway of India monument in Mumbai. Picture: AP

5.20am: G7 pledge on growth

G7 finance ministers and central bank chiefs vowed to “do whatever is necessary” to safeguard jobs and the economy from disruptions caused by the coronavirus pandemic.

The officials said they are working cooperatively with “substantial and complementary packages” to help companies weather the impact.

“We will do whatever is necessary to restore confidence and economic growth and to protect jobs, businesses, and the resilience of the financial system,” the group said in a statement.

AFP

5.15am: China to lift Hubei lockdown

Chinese authorities said they will end a two-month lockdown of most of coronavirus-hit Hubei province at midnight, as domestic cases of what has become a global pandemic subside.

People with a clean bill of health will be allowed to leave, the provincial government said, easing restrictions on movement that were unprecedented in scale. The city of Wuhan, where the virus was first detected in December, is to remain locked down until April 8.

China barred people from leaving or entering Wuhan beginning Jan. 23 in a surprise middle-of-the-night announcement and expanded that to most of the province in succeeding days. Trains and flights were cancelled and checkpoints set up on roads into the central province.

5.10am: ‘Collapse’ for eurozone businesses

Businesses in the eurozone suffered “an unprecedented collapse” in March because of the novel coronavirus pandemic, according to a closely watched indicator released Tuesday by IHS Markit.

Provisional data showed the slump in activity in the 19-nation zone in March “far exceeding that seen even at the height of the global financial crisis,” with the company’s PMI survey diving to 31.4.

A reading below 50 points indicates a contraction. In February, the index had stood at 51.6. The latest reading for March is the lowest since IHS Markit started its PMI survey in 1998.

The indicator reflected a near-shutdown of eurozone economies as COVID-19 sweeps across Europe.

Major economies Italy, France, Germany and Spain are all deeply affected and have implemented severe social and business restrictions to try to slow the virus’s spread, by keeping potential carriers at home.

AFP