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March 2 - Australian shares snapped a five-day losing streak with a sharp bounce on Thursday, as sentiment was supported by a combination of stronger global manufacturing activity and a pledge by U.S. President Donald Trump to boost economic growth.
In his first speech to the Congress, Trump adopted a less combative tone and flagged a surge in fiscal stimulus, propelling Wall Street stocks sharply higher. The Dow Jones Industrial Average blasted through the 21,000-point mark for the first time.
That helped push the S&P/ASX 200 index up 1.3 percent, or 71.804 points, to 5,776.60 at the close of trade, led by financials and material stocks.
Global markets have been rattled in the past month or so as investors feared Trump’s protectionist threats would hurt global growth, while lack of clarity around economic policies kept risk assets on the defensive.
“Today they’re just bouncing back a little bit and of course we have a very very strong lead from Wall Street. So the whole market is carried higher by the fact that there is a lot of buying out there today,” said Christopher Conway, head of research and trading at Australian Stock Report.
The “Big Four” banks rose between 1 to 1.3 percent.
Mining giant South32 scored the biggest gain on the benchmark index, adding 9.2 percent.
The ASX 300 Metals and Mining index rose 3.3 percent, snapping a 6-day losing streak, with the world’s biggest miner by market capitalization BHP Billiton surging 3.3 percent.
The gold index climbed 0.5 percent, despite lower bullion prices.
“Gold stocks had fallen quite sharply in the previous two sessions on almost no news. There was some expectation that Donald Trump would say something negative for gold, so investors sold down Australian gold equities,” Conway said.
On the losing ledger, telecom stocks ended lower, with sector giant Telstra extending losses from the previous session, finishing 1.5 percent lower, after trading ex-dividend.
New Zealand’s benchmark S&P/NZX 50 index crept up 0.4 percent, or 27.05 points, to finish the session at 7,175.83, supported by financials and utilities.
Westpac Banking Corp gained 1.8 percent, while Mercury NZ Ltd rose 1.6 percent.
Reporting by Sandhya Sampath in Bengaluru, Additional reporting by Susan Mathew in Bengaluru; Editing by Shri Navaratnam