Hopes that the coronavirus pandemic is peaking in the US lifted Wall Street overnight, setting up the ASX for a positive start.
Australian index futures climbed 70 points or almost 1.4 per cent to 5248 after US stocks rallied more than 3 per cent.
The S&P/ASX 200 looks likely to recoup yesterday's 0.9 per cent slump at today's open, but the session will test investors' willingness to hold through the four-day Easter break. Wall Street will trade twice before Australian markets re-open on Tuesday: tonight and on Easter Monday, which is not recognised as a public holiday in the US.
The US health sector surged overnight after Bernie Sanders dropped out of the race for the Democratic presidential nomination. The broader market was boosted by signs of progress in containing the Covid-19 outbreak, which prompted President Donald Trump to declare he wanted to re-open the economy soon.
The S&P 500 rallied 91 points or 3.41 per cent, reversing Tuesday's 0.6 per cent setback. The Dow put on 780 points or 3.44 per cent, and the Nasdaq 204 points or 2.58 per cent.
Health stocks climbed 4.2 per cent after Sanders suspended his campaign.
Private health insurer UnitedHealth Group jumped 8 per cent. Sanders' departure clears the way for a Trump v Joe Biden presidential run-off in November. The democratic socialist's candidacy had spooked Wall Street because of his support for universal health care and other policies seen as market-unfriendly, including campaign promises to rein in Wall Street and big corporations. In Trump and Biden they have two traditional candidates who are unlikely to spring major policy surprises.
Traders seized on signs the US is gaining the upper hand against the virus pandemic. The number of new infections in the US each day has fallen since Friday. The global daily infection rate has also dropped. The US's top infectious disease expert said the decline meant the death toll in the US could be lower than originally projected. President Trump reiterated that he wants to ease restrictions as early as possible.
"We want to get it [the economy] open soon," he said. "I think maybe we're getting to the very top of the curve."
Companies hit hard by the virus mounted strong rallies. The three major listed cruise lines all climbed at least 6 per cent. Casino companies MGM Resorts and Wynn Resorts both added more than 10 per cent. Airlines also surged, with United putting on 12.4 per cent and American 10.9 per cent.
The real estate sector rose 7.4 per cent on hopes of a return to normal economic activity. The energy sector was close behind, rising 6.7 per cent ahead of a virtual meeting scheduled tonight for major oil producers. Brent crude settled 97 cents or 3 per cent ahead at US$32.84 a barrel. Oil has rebounded strongly over the last week amid hopes Saudi Arabia and Russia find enough common ground to end a damaging price war. Data overnight showed US crude production declined last week from near record levels.
The improving market mood lifted Australian miners in the US following losses in the UK. BHP's US-listed stock rose 2.05 per cent after its UK-listed stock shed 3.75 per cent. Rio Tinto gained 0.59 per cent in the US and gave up 2.11 per cent in the UK. The spot price for iron ore landed in China improved $1.35 or 1.6 per cent to US$83.30 a dry ton.
Aluminium fell to a four-year low as a rise in stockpiles sharpened concerns about a substantial surplus. Benchmark aluminium on the London Metal Exchange declined 1 per cent to US$1,425.85 a tonne. Copper lost 0.8 cent, lead 1.2 per cent, zinc 0.3 per cent and tin 1.7 per cent. Nickel gained 0.3 per cent.
Gold marked time as traders mulled the minutes from the last Federal Reserve meeting. Gold for June delivery settled 60 cents or less than 0.1 per cent ahead at US$1,684.30 an ounce before the release of the minutes, then eased $4.50 or 0.2 per cent to US$1,679.40.
The dollar climbed almost 1 per cent to 62.26 US cents.
The day ahead brings the Reserve Bank's biannual assessment of the financial system at 11.30 am EST. Tonight brings a virtual meeting of the Organization of the Petroleum Exporting Countries (OPEC) and allies, as well as a meeting of the Eurogroup nations. and in the US, weekly jobless benefit claims and a speech by Federal Reserve Chair Jerome Powell.