June 3, 2020 / 6:49 AM / a month ago

Australia shares end near 3-mth high as investors eye recovery

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* Aussie oil stocks hit highest since March 9

* Australia’s economy already in recession - Treasurer

* BNPL firms Zip, Afterpay hit record highs

By Shashwat Awasthi

June 3 (Reuters) - Australian shares closed at a near three-month high on Wednesday, boosted by energy and financial stocks, as risk appetite was whetted by prospects of an economic recovery from a coronavirus-induced recession.

The S&P/ASX 200 rose 1.8% to 5,941.60, gaining for a third straight session. The index is currently on a five-week winning run.

Financials added 3.4%, while oil firms climbed 3% to a near three-month high.

Data showed Australia’s economy shrank in the March quarter and was expected to contract further in the current quarter due to virus-enforced shutdowns, leading the country’s treasurer to concede that the economy was already in recession.

Effective containment of the disease, however, has helped to re-open businesses quickly, prompting the central bank to raise the possibility of a softer-than-feared economic downturn and offsetting concerns around Sino-U.S. relations.

The benchmark is up 30% since hitting a multi-year low on March 23.

“The focus is now on Q2 GDP and on the recovery,” ANZ Research analysts said. “The better news on the health outcomes and earlier relaxation of restrictions suggest that the drop may not be as deep as earlier feared.”

“The recovery is unlikely to be V-shaped and further stimulus will likely be required to support growth over the next year or so,” they added.

The Reserve Bank of Australia on Tuesday held interest rates at a record low and left the door open for more stimulus.

Buy-now-pay-later (BNPL) firm Zip soared 21% to an all-time high, after surging in the previous session on a deal to expand in the booming United States market.

Larger peer Afterpay, itself on a strong rally since March, advanced 5.2% to a fresh record high.

In New Zealand, which could lift all virus-induced curbs next week, the S&P/NZX 50 gained 0.8% to 11,118.27 and hit a near three-month peak.

Reporting by Shashwat Awasthi in Bengaluru; Editing by Aditya Soni

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