Australia shares notch best week in 2 months on broader global rally

Australia shares notch best week in 2 months on broader global rally

By Shruti Sonal

Australian shares notched their best week since mid-November, tracking a broader global rally as investors priced in further US stimulus and swift economic recovery, although gains were tempered on Friday as the city of Brisbane went into a lockdown.

The S&P/ASX 200 index ended 0.7 per cent higher at 6,757.9 points. The session’s gains helped the benchmark post a 2.6 per cent weekly rise, its biggest since Nov. 13, 2020.

Bets that a Democrat-controlled Senate would help President-elect Joe Biden implement further stimulus in the near future helped boost sentiment through the week, while the Australian government’s plan to accelerate planned inoculation against Covid-19 also supported risk appetite.

With the Democrats in control of the presidency, the Senate and the House, we will likely see the stimulus packages that people have talked about and that’s driving global markets at the moment, said Damian Rooney, director of equity sales at Perth-based Argonaut.

Index gains were curbed on Friday as Australia’s third-largest city entered a three-day lockdown, after the discovery of a case of the more contagious variant of Covid-19 that emerged in Britain.

“We have a small outbreak, but a small outbreak can become a pretty big outbreak pretty quickly in Brisbane and the lockdown there which just reminds everyone of the fragility of our situation,” Rooney added.

The tech sub-index ended 2.5 per cent higher, as buy-now-pay-later firms such as Afterpay Ltd and Zip Co Ltd recouped previous session’s losses.

Australian energy stocks, buoyed by rising oil prices after major producer Saudi Arabia pledged to cut production, posted their best week since Nov. 13, 2020.

US-exposed domestic healthcare stocks saw their best day in a month on a stronger greenback, with heavyweight CSL Ltd rising 1.4 per cent.

Miners added 8 per cent for the week, their best since November 2016, supported by strong iron ore and stainless steel prices amid worries of tight supply.

BHP Group, Rio Tinto and Fortescue Metals Group posted weekly gains of about 8 per cent each.

New Zealand‘s benchmark S&P/NZX 50 index closed 0.5 per cent firmer and posted its third consecutive weekly gain.

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