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Stocks surged to their highest level in more than a month after reports of a possible breakthrough in treating Covid-19 triggered a wild run in US index futures.  

The S&P/ASX 200 charged 118 points or 2.2 per cent to 5534 by mid-session, positioning the index for a fourth straight winning week. Today’s rally extended the local benchmark’s tally for the week beyond 140 points or 2.7 per cent.

The outlook for the day was flipped on its head before the open by a report that an existing drug had performed well in treating Covid-19 patients. S&P 500 index futures surged 92 points or 3.3 per cent after health-care media site Stat News said a clinical trial of Gilead Sciences’ antiviral remdesivir in Chicago had produced rapid recoveries in patients.

The report said nearly all patients recovered and were discharged from hospital in less than a week. Similar trials of the drug were underway in other institutions. Gilead said full results were due by the end of the month. Shares in the American pharmaceutical company jumped 16.4 per cent in after-hours trade.

The report helped offset news of a record contraction in China’s economy in the first quarter. Chinese GDP shrank 6.8 per cent from the same period last year. Other indicators were mixed: March industrial production was stronger than expected, but retail sales and fixed asset investments both missed analysts’ targets.

All 11 Australian sectors advanced, led by gains of at least four per cent in industrials and consumer discretionary stocks. Qantas jumped 7.2 per cent and Sydney Airport 7.6 per cent. Transurban climbed 7.7 per cent after broker Morgans upgraded the toll road operator’s stock from hold to add. Supply-chain logistics firm Brambles edged up 1.7 per cent after announcing the first nine months of the year were in line with previous guidance.

The consumer discretionary sector was fired up by sharp gains in casino operators. SkyCity Entertainment Group rallied 11.3 per cent, Star Entertainment Group 4.7 per cent,  and Crown Resorts 1.5 per cent. Automotive aftercare supplier Bapcorp climbed 8.5 per cent after completing an institutional placement to reduce debt and improve liquidity.

The wild ride for shareholders in Afterpay continued with another double-digit rally. Investors who bought the low on March 23 have seen the value of their holdings triple following today’s 10 per cent rise. The morning’s other star performers included property fund manager Charter Hall, up 12.4 per cent, Stockland up 9.6 per cent, and Estia Health, up 8.7 per cent.   

Mining heavyweight Rio Tinto rose 4.6 per cent after increasing first-quarter iron ore shipments by 5 per cent from the same period last year. The company said Chinese demand was recovering after Covid-19 lockdowns, but the outlook in the rest of the world was less certain. BHP put on 2.4 per cent and Fortescue 1.3 per cent.

The big four banks all gained between 0.9 and 1.9 per cent, with NAB leading and CBA trailing.

China’s Shanghai Composite rallied 0.9 per cent, Hong Kong’s Hang Seng 2.5 per cent and Japan’s Nikkei 2.6 per cent.

Brent crude climbed 38 cents or 1.4 per cent to $US28.20 a barrel. Gold slipped $5.70 or 0.3 per cent to $US1,726 an ounce.

The dollar bounced 0.8 per cent to 63.79 US cents.

What’s hot today and what’s not:

Hot today: The virus pandemic has injected life into several otherwise moribund stocks. Tech reseller Harris Technology (ASX:HT8) has in the past gone weeks without a trade, but this morning jumped 295 per cent after announcing deals to distribute Chinese-made face masks and hand sanitisers. Harris has sold an initial 30,000 masks and will have another 200,000 approved masks for sale later this month. The company said it expected revenue from selling masks and sanitisers to reach $400,000 for this quarter.

Not today: News of a collapse in sales volumes for the Australian licensee for Coca-Cola sent the share price into reverse this morning. Coca-Cola Amatil (ASX:CCL) said solid momentum in the first three months of the year gave way to declines in the first two weeks of April in the company’s Australian, New Zealand, Indonesian and Papua New Guinean markets of up to 50 per cent. Despite the falls, the company said it was well placed to navigate through the crisis. The share price dropped 5 per cent.  

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