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The share market is on course for its best week of the year after the banking sector surged for a fourth session.

The S&P/ASX 200 soared 114 points or 2 per cent to push its gains for the week near 400 points or more than 7 per cent. This week’s advance easily outstrips a 6.3 per cent rally in early April as the market bounced off pandemic lows. The index briefly pushed above 5900 for the first time since the second week of March.

Fund managers and momentum traders scrambled to get on board a breakneck rally in the big four that has fuelled a new up-leg in the post-pandemic recovery. After two months of sideways drift, bank stocks broke out of the doldrums on Tuesday and have not  looked back. Whatever their reservations, fund managers sitting on cash have had no choice but to join in for fear of missing out on the recovery.

National Australia Bank climbed 5.8 per cent this morning to an 11-week high. Shares that traded as low as $15.11 last week hit $19.27 today. ANZ put on 5.6 per cent, Westpac 4.7 per cent and Commonwealth Bank 3.5 per cent. Gains this week for the big four have ranged from 14.1 per cent for CBA to 26.8 per cent for Westpac at today’s peak.

Gains in the other ten sectors were a shadow of the 4.2 per cent advance in financials. Utilities was a distant second with a rise of 2.6 per cent as APA Group gained 3.8 per cent, AusNet Services 1.6 per cent and AGL Energy 0.9 per cent.

Resource stocks led the initial market rebound back in March, but have stalled well short of their old highs as the threat of a revived US-China trade war clouded the demand outlook. This morning BHP gained 2.5 per cent, Fortescue 3 per cent and Rio Tinto 2.4 per cent.

The index’s best performers were mostly stocks leveraged to economic recovery as lockdown restrictions ease: consumer lender Credit Corp climbed 9.5 per cent, British banking group Virgin Money UK 9.4 per cent, manufacturer Brickworks 7.5 per cent and childcare operator G8 Education 6.3 per cent.

Reserve Bank Governor Philip Lowe this morning said the economy was tracking better than the central bank expected. Mr Lowe said the bank’s stimulus measures were working and the April jobs collapse was not as bad as he feared. He said it was “very important that we don’t withdraw the fiscal stimulus too early”.

“With the national health outcomes better than earlier feared, it is possible that the economic downturn will not be severe as earlier thought,” he told the Senate Select Committee on COVID-19. “Much depends on how quickly confidence can be restored.”

US index futures edged higher after last night’s Wall Street rally. S&P 500 index futures rose 11 points or 0.4 per cent. The S&P 500 added 44 points or 1.48 per cent overnight to close above the 3,000 level and the 200-day moving average, a bullish signal for technical traders.

The global rally lifted most Asian markets, but Hong Kong’s Hang Seng lagged with a fall of 0.2 per cent after the US threatened to terminate special trading terms that differentiate the territory from China. The Shanghai Composite advanced 0.4 per cent, and Japan’s Nikkei 2.1 per cent.

Oil extended an overnight drop following reports that Russia wants to increase production as soon as July. Brent crude slid 68 cents or 2 per cent to $US34.06 a barrel. Gold improved $2.50 or 0.2 per cent to $US1,713.20 an ounce.

The dollar dipped 0.08 per cent to 66.15 US cents.

What’s hot today and what’s not:

Hot today: Aerial mapping group Nearmap (ASX:NEA) was the index’s best performer after announcing it expects to reach break-even by the end of next month. Annualised contract value has passed $102 million and the company has introduced a range of cash management initiatives to reduce operating and capital costs by roughly 30 percent. The company remained on track to finish the financial year with a balance of $32-35 million. The share price jumped 18.2 per cent to its highest level since  late January. 

Not today: A tough morning for investors in junior explorer Aldoro Resources (ASX:ARN). The share price dived 45.1 per cent after the initial results from a maiden reverse circulation drilling program at the company’s flagship Penny South gold project in WA failed to meet expectations. While the company talked up follow-up drilling where the drillbit found gold mineralisation, the share price reverted to pre-drilling levels.

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