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A strong rebound in the big banks helped the share market claw back a quarter of yesterday’s losses, offsetting a heavy fall for Qantas.

The S&P/ASX 200 bounced 37 points or 0.6 per cent, but remained on course for a weekly loss after yesterday’s 148-point tumble. A close around these levels would leave the index more than one per cent lower for the week.

As in the US, the financial sector set the market tone, rising 1.9 per cent. ANZ and Westpac led the advance with gains of 2.6 per cent. NAB put on 1.8 per cent and CBA 1.6 per cent. Asset manager IFL Holdings was the index’s best performer with a rise of 9.8 per cent. AMP and Challenger were close behind with up-ticks of 4.9 per cent and 4.3 per cent, respectively.

A little heat came out of the rally after Victoria announced 30 new cases of COVID-19, continuing a run of double-digit growth. Yesterday’s tally of 33 new cases was the highest in more than two months, sharpening fears that a second outbreak is gathering pace. There are 183 known active cases in the state.

The S&P 500 climbed 33 points or 1.1 per cent overnight after banking regulators eased restrictions with the aim of freeing up working capital for the sector ahead of an anticipated wave of bad debts. US index futures wobbled, then steadied this morning after the Federal Reserve later ordered banks to suspend share buybacks and limit dividend payments next quarter. S&P 500 index futures eased two points or less than 0.1 per cent following a 3.9 per cent dive in Nike after the sports clothing giant unveiled an unexpected quarterly loss.

Qantas was the biggest drag on the index, swooning 7.8 per cent after raising almost $1.4 billion at a discount to fund the airline through the long post-lockdown recovery. Shares in the national carrier fell to $3.78, well above the raising price of $3.65.

American private equity firm Bain Capital emerged as the new owner of rival Virgin Australia after Cyrus Capital dropped out, accusing administrator Deloitte of failing to engage with its bid. Bain Capital was announced as the winner of a bidding war this morning and promised to retain as many jobs as possible. The debt-laden airline was placed in administration in April.

The materials sector was the second-best performer, rising 1 per cent as BHP added 2 per cent, Fortescue 1.2 per cent and Rio Tinto 1.3 per cent. Woodside edged up 1.2 per cent as crude oil extended its overnight rebound.  Brent crude improved 45 cents or 1.1 per cent this morning to $US41.50 a barrel, extending yesterday’s rise of 74 cents.

Health was the worst of the sectors as industry giant CSL slipped 0.9 per cent. Cochlear gave up 0.8 per cent and Sonic 0.1 per cent. The utilities sector turned negative as APA Group dipped 0.2 per cent and AGL Energy 0.3 per cent.

A mixed morning on Asian markets saw Hong Kong’s Hang Seng fall 0.5 per cent and Japan’s Nikkei rise 0.9 per cent. Mainland Chinese markets remained closed for a holiday.

Gold edged up 80 cents or less than 0.1 per cent to $US1,771.40 an ounce.

The dollar eased 0.1 per cent to 68.78 US cents.

What’s hot today:

Investors in the beleaguered Retail Food Group (ASX:RFG) enjoyed some relief this morning after the franchisor announced a pick-up in shopping centre foot traffic. The company forecast full-year earnings before interest and tax of around $35 million as customer numbers at its Gloria Jean’s, Donut King, Michel’s Patisserie and Brumby’s Bakery outlets recover. Rent relief had been obtained for more than 400 outlets, limiting the number of permanent store closures to less than ten. The share price jumped 18 per cent.

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