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Australia shares rise as vaccine hopes lift energy, travel stocks

Published 10/11/2020, 05:11 pm
Updated 10/11/2020, 05:12 pm
© Reuters.
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* Investors kicking off new chapter of sectoral rotation - analyst

* Energy firms record best day in over 7 months

* Energy: +8.5, Financials: +3.9; Gold: -8.3; Tech: -6.2 (Updates to close)

By Deepali Saxena

Nov 10(Reuters) - Australian shares closed higher for a fourth straight session on Tuesday as progress in the development of a COVID-19 vaccine raised hopes of a swifter recovery in the global economy and bolstered hard-hit travel, tourism and energy stocks.

The S&P/ASX 200 index .AXJO , however, ended 0.7% higher after jumping 2.2% to a more than eight-month high in early session as a slump in overnight bullion prices weighed on gold stocks .AXGD .

Risk appetite got a boost globally after U.S. drugmaker Pfizer (NYSE:PFE) PFE.N and German partner BioNTech BNTX.O said a large-scale trial of their vaccine showed it was more than 90% effective in preventing COVID-19. appeared to have switched out from big tech into the long-underperformed traditional industries last night, kicking off a new chapter of sectoral rotation," Margaret Yang, a strategist with news and research website DailyFX, wrote in a note.

"How to strike a balance between an escalating pandemic wave against vaccine hopes will likely be a main theme for trading till year end."

Tourism and travel-related stocks such as Flight Centre Travel Group FLT.AX , Sydney Airport Holdings SYD.AX and Qantas Airways QAN.AX rose more than 8% each on the news.

Energy stocks .AXEJ , which have been among the worst hit by the pandemic due to a plunge in fuel demand, surged as much as 8.9% to record their best session since early April.

Nearly all stocks on the sub-index were higher, with Oil Search OSH.AX and Beach Energy BPT.AX climbing more than 14% each.

Heavyweight financial stocks .AXFJ rose to their highest levels since June 10, with the "Big Four" banks adding between 3% and 7.6%.

National Australia Bank NAB.AX ended 7.6% higher, overtaking Sydney-based rival Westpac Banking Corp WBC.AX as the country's second-largest lender based on market value.

However, tech .AXIJ and consumer .AXSJ stocks, which have so far benefited from an online shopping boom and panic buying triggered by the pandemic, dropped more than 3%.

Across the Tasman Sea, New Zealand's benchmark S&P/NZX 50 index .NZ50 hit a record high before closing marginally higher at 12,612.39.

Investor attention will turn to country's central bank meeting on Wednesday, where it is expected to unveil a new monetary policy tool to drive borrowing costs for lenders lower and maintain the official rate at 0.25%.

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