The dire economic outlook was briefly forgotten as fund managers dabbed lipstick on a pig of a quarter for Australian shares, sending the market sharply higher for a second day.
The ASX 200 surged 130 points or 2.5 per cent to 5311, temporarily extending the index's two-day gain beyond 500 points. Despite the rebound, the index remained on track to record a quarterly loss of more than 1,300 points after the spreading Covid-19 virus triggered a market meltdown earlier in the month.
This week's buying was anecdotally attributed to portfolio managers scrambling to put the best possible spin on their end-of-quarter reports to investors. While no superannuation holder should expect miracles, the market has bounced more than 1,100 points since last Monday.
The rally temporarily accelerated after Chinese data showed an extraordinary rebound after the virus lockdown. The official manufacturing purchasing managers' index jumped to 52 this month from a February reading of 35.7. Economists had anticipated a much softer recovery to around 45. Services activity also recovered, lifting the non-manufacturing PMI to 52.3 from a record-low February figure of 29.6.
Bargain-hunters continued to pick off the market's most-beaten-up stocks in anticipation of brighter days ahead. The index's best performers this morning included receivables management company Credit Corp, up 25.7 per cent to $13.71 after hitting $6 last week; graphite miner Syrah Resources, up 20.2 per cent to 28.5 cents, almost double last week's low; and media group Nine Entertainment, which traded at 81 cents last week and this morning climbed 12.4 per cent to $1.18.
Consumer discretionary stocks led the rally. Pokie-maker Aristocrat jumped 8.2 per cent, Crown Resorts 9.4 per cent and JB Hi-Fi 12 per cent. Sector leader Wesfarmers rose 1.6 per cent after locking in a pre-tax profit of $130 million by selling another 5.2 per cent of its stake in supermarket Coles. Coles fell 6.9 per cent.
The scale of the recent rebound was underlined by a morning charge by the financial sector towards a technical bull market, defined as a rise of at least 20 per cent off a low. The sector surged 5 per cent today to a high of 4549, just six sessions after bottoming at 3591. All four big banks gained at least 4.2 per cent, with Westpac outperforming with a rise of 7.9 per cent. Macquarie Group put on 5.5 per cent.
Gold stocks missed the advance following overnight declines in precious metals. Resolute Mining slipped 7 per cent, Evolution Mining 5.3 per cent and Newcrest 2.8 per cent. Gold eased a further $6.20 or 0.4 per cent this morning to $US1,637.20 an ounce.
There was nothing in the morning's domestic economic newsflow to justify today's burst higher. The ANZ Roy-Morgan Consumer Confidence Index dived 9.8 per cent over the last week to 65.3, the lowest figure ever recorded in the survey's 47-year history.
Market sentiment in the US remained positive following a 3.35 per cent upswing in the S&P 500 overnight. S&P 500 index futures rose ten points or 0.4 per cent this morning.
Asian markets joined the rally. China's Shanghai Composite climbed 0.6 per cent, Hong Kong's Hang Seng 1.7 per cent and Japan's Nikkei 0.8 per cent.
Oil rebounded from an 18-year low. Brent crude bounced 30 cents or 1.3 per cent to $US23.06 a barrel.
The dollar dipped 0.4 per cent to 61.47 US cents.
What's hot today and what's not:
Hot today: Despite the turmoil, the market continues to reward the promise of future riches. Legend Mining (ASX:LEG) almost doubled its market capitalisation after announcing a "spectacular start" to a drilling campaign at its Mawson prospect in the Fraser Range in WA. Diamond drilling intersected three massive sulphides deposits in what Managing Director Mark Wilson called "the most significant and exciting discovery in the Fraser Range, post Nova". Assay results are expected within a month. The share price was last up 71.6 per cent at 11.5 cents.
Not today: While most companies fret about the coronavirus, some are still dealing with the devastation of the last major disaster. Ninety-five per cent of trees owned by Kangaroo Island Plantations (ASX:KPT) were damaged by bushfires that ravaged the island at the end of last year. The company's shares finally came out of suspension this morning and tumbled 56.9 per cent as investors confronted the grim news that most of the cash crop was gone. The good news? The company says the coronavirus has had no impact on the business.