Views Article – Sharenet Wealth

Australasia, News

Australian shares hit 3-week high on hopes of virus vaccine, fresh stimulus

* Australia’s trade surplus widened in May

* Afterpay stock hits record high

* NZ shares hit over 3-week peak (Updates to close)

By Pranav A K

July 2 (Reuters) – Australian shares ended at their highest level in three weeks on Thursday, led by financials and technology stocks, as positive developments in a COVID-19 vaccine trial and optimism about fresh stimulus raised hopes of a quicker economic recovery.

Rising for the third straight day, the S&P/ASX 200 index gained 1.7% to 6,032.7, its highest closing level since June 11.

Investors cheered promising results of a COVID-19 vaccine developed by German biotech firm BioNTech and U.S. pharmaceutical giant Pfizer, which was found to be well tolerated in early-stage human trials.

Meanwhile, data showed that Australia’s trade surplus widened in May, but came below expectations of a Reuters poll.

However, Michael McCarthy, chief market strategist at CMC Markets, said the trade data was much better than the “terrible” numbers in April and was helping support the V-shaped recovery story. “At the moment, the optimism around government and central bank stimulus and potential for a vaccine cure is overwhelming the negativity around rising cases in southern states of the U.S. and elsewhere.”

Leading gains in Australia, technology stocks jumped 3.7% to hit a record peak, taking cues from its peers in the United States.

Afterpay Ltd soared 9.5% to hit an all-time high and was the benchmark’s second-biggest gainer after brokerage Citi more than doubled its price target on the buy-now-pay-later firm’s stock.

Heavyweight financials also gained 1.9%, led by the “Big Four” banks.

News of encouraging results about a potential vaccine, coupled with solid U.S. manufacturing data, dented demand for safe havens and pushed gold stocks down 0.2%.

Across the Tasman Sea, New Zealand’s benchmark S&P/NZX 50 index climbed to its highest since June 9, ending up 1.3% at 11,502.52.

Travel equipment retailer Kathmandu Holdings was the top gainer on the index, surging 11.4% on positive same-store sales growth. (Reporting by A K Pranav in Bengaluru; Editing by Rashmi Aich)

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