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Australia stocks rally for 4th day as stimulus supports rebound hopes

Published 04/06/2020, 04:41 pm
Updated 04/06/2020, 04:42 pm
© Reuters.
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* Australia retail sales post biggest-ever fall in April

* Steep drop will not repeat in May - Citi

* NZ index hits highest since March 9

By Shashwat Awasthi

June 4 (Reuters) - Australian shares ended higher for the fourth straight session on Thursday, as a fresh stimulus package to revive an economy battered by the coronavirus bolstered bets of a rebound from its first recession in three decades.

The S&P/ASX 200 .AXJO gained 0.8% to 5,990.8 after a A$680 million package for residents to build or renovate their homes - the country's fourth stimulus measure since the pandemic began. a capitulation on Friday, the benchmark is set for its sixth straight week of gains.

Australia's treasurer conceded on Wednesday that the economy was in recession, a view backed by Thursday's data showing a historic plunge in retail sales for April, amid shutdowns. investors seem unperturbed as they continue to back a quicker-than-expected rebound Down Under and anticipate further stimulus measures from major central banks to support global recovery.

"The scale of fiscal easing announced to date, which could increase further, is significantly larger than the fiscal response seen after the global financial crisis," said Marina Stefani, director at Fitch Ratings.

"Massive policy easing will undoubtedly help the pace of the post-crisis economic recovery."

Australia has managed to contain the virus and re-open businesses swiftly, which analysts believe will help cushion further blows.

"With personal movement restrictions somewhat lifted and evidence that trading conditions are improving, we don't expect another large decline (in retail sales) in May," Citi analysts said.

Shares of Qantas QAN.AX surged 8.4% to a near three-month high after the airline outlined plans to boost domestic capacity as travel restrictions ease. firm Nufarm NUF.AX , however, dropped almost 11% on its worst day since March 23, after warning of lower second-half profit at its European business. Zealand's benchmark S&P/NZX 50 .NZ50 rose 0.9% to 11,222.8, up for the fourth straight session.

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