Aussie Shares Rally After Early Panic

March 10, 2020 Updated: March 10, 2020

Australia’s turbulent stock market has rebounded, finishing more than three percent higher in a dramatic recovery from early panic selling.

The benchmark S&P/ASX200 index closed up 179 points, or 3.11 percent, at 5,939.6 points – despite plunging 3.8 percent just after it opened.

The broader All Ordinaries index finished up 173.4 points, or 2.98 percent, at 5995.8.

In percentage terms, it was the ASX’s best day since a 3.34 percent jump on November 10, 2016, following Donald Trump’s election.

But no one was celebrating, given that it came just a day after the second-worst session in ASX history, a 455.7-point, 7.33 percent crash.

“I think the big story is exhaustion from a few days of tumultuous selling,” said Betashares chief economist David Bassanese.

“I don’t think we’ve found a bottom,” he added, noting there were likely more coronavirus cases to be detected in the United States.

“It could just be a temporary reprieve.”

CommSec analyst James Tao says it clawed back some ground in morning trade after Trump announced a stimulus package to help US businesses overcome the virus impact.

“The stimulus plan boosted confidence a little, ” he said.

Then the market rallied just after noon, as Chinese markets began to open higher buoyed by a new wave of confidence, he said.

Tuesday’s local rise could be a combination of factors including a swell of optimism, buying in a dip, or a dead cat bounce – the latter a very technical term for a temporary recovery in share prices after a huge fall.

The spreading coronavirus and an oil price war between Saudi Arabia and Russia are still adding to disruption, Tao said.

Every sector rose except utilities and property.

Although battered, banking rose most, by 4.7 percent, with tech stocks close behind.

Commonwealth Bank gained 6.1 percent to $73.37, ANZ rose 4.2 percent to $21.13, NAB climbed 4.8 percent to $21.10 and Westpac added 5.2 percent to $20.54.

Macquarie was up 4.2 percent to $126.55.

Among the major miners, BHP added 6.2 percent to $29.25, Rio Tinto gained 3.5 percent to $83.61 and Fortescue Metals rose 6.8 percent to $9.16.

Goldminers were mostly down however as the price of the precious metal dipped one percent to around $US1,660 an ounce.

Newcrest dipped 2.3 percent and Northern Star 3.7 percent, although Evolution was up 1.2 percent.

With the price of Brent crude hovering around $US33 a barrel – down from around the $US50 mark at the start of the month – the energy sector bounced back from a mammoth 20 percent drubbing it took on Monday, gaining 3.4 percent.

Santos rose 0.6 percent, Woodside gained 2.1 percent and Oil Search rose 1.8 percent.

Viva Energy Group was the biggest ASX200 gainer, climbing 13.8 percent.

The Aussie dollar meanwhile was buying 65.62 US cents, up from 65.46 US cents at the market close on Monday.

On the ASX:

* The benchmark S&P/ASX200 index finished Tuesday up 179 points, or 3.11 percent, at 5,939.6 points

* The All Ordinaries closed up 173.4 points, or 2.98 percent, at 5,995.8 points

* At 1649 AEDT, the SPI200 futures index was up 249 points, or 4.36 percent, at 5,965 points

Currency Snapshot:

One Australian dollar buys:

* 65.50 US cents, from 65.46 US cents on Monday

* 68.60 Japanese yen, from 67.17 yen

* 57.67 euro cents, from 57.40 cents

* 50.20 British pence, from 50.13 pence

* 104.06 NZ cents, from 104.39 cents.