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Australian shares look set to join a global market recovery after Chinese authorities injected funds to cushion their economy from the coronavirus epidemic.

ASX SPI200 index futures rallied 44 points or 0.6 per cent to 6932 as US stocks soared and key commodities rebounded. Copper broke a record 14-session losing run. Iron ore climbed back above $US80 a ton.

Wall Street mounted its biggest rally in six months after China’s central bank injected almost $US250 billion into the economy via reverse repos (repurchase agreements). The move helped lift Asian share markets out of their doldrums and fuelled buying in Europe and the US.

The S&P 500 climbed 49 points or 1.5 per cent, reversing all of Friday’s heavy fall. The Dow put on 408 points or 1.44 per cent during its best session in eight months.

The Nasdaq went even better, becoming the first of the three major indices to regain all of its losses since the virus outbreak sent shivers through world markets. The tech-heavy benchmark surged 195 points or 2.1 per cent to a record.

The mood on global markets began to improve on Monday and ratcheted up another notch yesterday as confidence grew in Chinese efforts to offset the economic impact of an epidemic that has infected more than 20,000 people and killed at least 420. President Xi Jinping called a special meeting of the Politburo on Monday and warned officials to do what it takes to contain the outbreak. Reuters reported that the central bank will likely cut its key rate later this month and reduce the amount of capital that banks must hold as reserves.

Yesterday’s financial injection helped the Shanghai Composite reverse early losses to finish 1.34 per cent higher. Hong Kong’s key index put on 1.21 per cent and Japan’s Nikkei 0.49 per cent. Here, the ASX 200 edged up 25 points or 0.37 per cent as the Reserve Bank left the cash rate on hold at 0.75 per cent. The pan-European Stoxx 600 bounced 1.64 per cent.

The US tech sector’s heavy exposure to Chinese demand meant it led the recovery. Apple and Microsoft gained 3.3 per cent as the NYSE Arca Technology 100 index rose 2.3 per cent. Trade bellwether Caterpillar added 2.89 per cent. Tesla surged 13.73 per cent.

Here, mining stocks look primed for a strong start following gains on overseas markets. BHP’s US-listed stock bounced 2.73 per cent and its UK-listed stock 2.79 per cent. Rio Tinto gained 3.44 per cent in the US and 3.01 per cent in the UK. The rallies came after the spot price for iron ore landed in China rebounded $3.25 or 4.1 per cent to $US83.05 a dry ton.

Copper’s extraordinary run of losses on the London Metal Exchange ended at 14. Benchmark copper traded 2.6 per cent higher at $US5,666 a tonne in official rings. Aluminium was ahead 1.5 per cent, nickel 1 per cent, lead 0.9 per cent and zinc 3.1 per cent. Tin was flat.

Oil slumped to its lowest level in more than a year as predictions of a 20 per cent slump in Chinese demand kept buyers away. Brent crude settled 49 cents or 0.9 per cent weaker at $US53.96 a barrel, its lowest settlement since the last day of 2018. OPEC and its allies are likely to meet next week to discuss possible production cuts.

Gold fell sharply, settling at a two-week low as demand for havens evaporated. Gold for April delivery settled $26.90 or 1.7 per cent lower at $US1,555.50 an ounce.

The dollar caught an updraft from the “risk-on” market mood, rising 0.7 per cent to 67.37 US cents.

January construction figures are due at 8.30 am EST. RBA  Governor Philip Lowe is scheduled to deliver a speech on the year ahead at 12.30 pm. China releases services activity figures at 12.45 pm. A busy night ahead on Wall Street includes crude oil inventories, trade data, a measure of services activity and private payrolls employment growth. Quarterly updates are due from General Motors and Peabody Energy.   

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