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Australia shares gain as investors bet on potential COVID-19 vaccine

(Reuters) - Australian shares finished higher on Monday in a choppy session as firmer job advertisement numbers and prospects of first batches of a COVID-19 vaccine by early next year outweighed the extension of virus-driven lockdowns in Melbourne.

FILE PHOTO: A board displaying stock prices is adorned with the Australian Securities Exchange (ASX) logo in central Sydney, Australia, February 13, 2018. Picture taken February 13, 2018. REUTERS/David Gray

Investors took some solace from the government’s deal with CSL to manufacture two vaccines - one developed by rival AstraZeneca and Oxford University, and another developed in CSL’s own labs with the University of Queensland.

Sentiment was also buoyed to a degree after job ads rose for a third straight month in August, though economists remained cautious about the outlook for jobs.

The S&P/ASX 200 index rose 0.3% to 5,944.8 at the close of trade, after starting the session in negative territory.

“I definitely think the vaccine will be a very big boost in terms of confidence that will mean we can start reopening the economy,” said James Tao, analyst at CommSec.

Tao added the positive developments regarding the vaccine and the lockdown in Victoria were opposing forces at the moment and would determine which way investor confidence would shift.

Coronavirus hotbed Victoria state’s extension of a hard lockdown in capital Melbourne on Sunday until September-end had weighed on the benchmark early in the session as investors anticipated further job losses.

Miners ended 2% higher after iron ore futures jumped on a recovery in downstream steel demand, with an added boost from gold stocks. [IRONORE/]

Global miners BHP Group and Rio Tinto climbed 2.4% and 2.5%, respectively.

Commonwealth Bank of Australia and Westpac Banking Corp led gains among financials, rising 1% and 1.9%, respectively.

Consumer and industrial stocks were the biggest drags on the benchmark, with Transurban Group slipping 2.8% and Woolworths easing 1.3%.

New Zealand’s benchmark S&P/NZX 50 index rose 0.3% to finish the session at 11,859.45.

Local shares of Westpac and Australia and New Zealand Banking Group both added 1.5% each.

Reporting by Arpit Nayak in Bengaluru, Editing by Sherry Jacob-Phillips

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