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Australian shares rebound 2% on RBA rate-cut hopes; NZ jumps

Published 03/03/2020, 12:08 pm
Updated 03/03/2020, 12:14 pm
© Reuters.  Australian shares rebound 2% on RBA rate-cut hopes; NZ jumps
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* ASX 200 rises after seven straight sessions of losses

* RBA likely to trim rates by 25 bps later in the day

* NZ shares mark best intraday gain since August 2011

By Niyati Shetty

March 3 (Reuters) - Australian shares rose 2% on Tuesday after seven straight sessions of declines, as investors priced in a possible rate cut by the central bank to help cushion an economic blow from the coronavirus outbreak.

The S&P/ASX 200 index .AXJO was up 1.9%, or 122.9 points, at 6,514.4 by 0100 GMT, after shedding 10.8% in the last seven sessions - its longest losing streak since September 2018.

The Reserve Bank of Australia is expected to cut its cash rate to a new low of 0.5% from 0.75% at its monthly review later in the day, as investors pinned hopes on a coordinated global monetary policy response after last week's stock market plunge. of a pandemic rattled markets last week, wiping more than $5 trillion from global share values, and stoking widespread expectations of monetary policy easing.

Australian financial futures 0#YIB: are now almost fully pricing in a quarter point cut to the cash rate. Last week, futures implied a one-in-five chance of such a move.

"Given Australia's current moderate growth environment, limited room for monetary easing and the COVID-19 impact on supply chains and demand, we think it is necessary for fiscal policy to also support growth," Cherelle Murphy, a senior economist at ANZ Research, said in a note.

Financials .AXFJ gained 1.5%, with the "Big Four" banks trading in positive territory. Westpac Banking Corp WBC.AX and National Australia Bank NAB.AX rose about 2% each.

The tech sector .AXIJ jumped nearly 5%, its best intraday gain in 18 months, tracking Wall Street peers. .N

Software maker Xero Ltd XRO.AX added 7.4% and buy-now-pay-later firm Afterpay Ltd APT.AX surged 8.3%.

Healthcare firms .AXHJ climbed as much as 3.4%, their biggest in six months. Drugmaker CSL Ltd CSL.AX added 3.3%, while U.S.-based Resmed Inc RMD.AX gained 6.3%.

Meanwhile, global miner BHP Group BHP.AX added up to 3.4%, Rio Tinto (LON:RIO) Ltd RIO.AX advanced 4.7% and Fortescue Metals Group FMG.AX climbed 5.5%, supported by substantial gains in iron ore prices on Monday. IRONORE/

Across the Tasman Sea, New Zealand's benchmark S&P/NZX 50 index .NZ50 jumped as much as 3.7% in its best intraday gain since August 2011.

The bourse was up 3%, or 334.87 points, at 11,439.97 by 0100 GMT.

Air New Zealand Ltd AIR.NZ and Tourism Holdings Ltd

THL.NZ were the best performers on the index, adding up to 10.1% and 7.9%, respectively.

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