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A rebound in Australian shares gathered pace ahead of a Reserve Bank policy statement as oil and US index futures rallied.

Resource stocks spearheaded gains as the S&P/ASX 200 advanced 57 points or 1.1 per cent to 5377. The energy sector put on 3.5 per cent, tech stocks 2.3 per cent and materials 2 per cent. Today’s index gains extended yesterday’s 1.4 per cent recovery, which partly reversed a 5 per cent tumble on Friday.

The Reserve Bank met this morning and is due to release a revised policy statement at 2.30pm EST. While the bank is not expected to reduce the cash rate from a record low 0.25 per cent, the accompanying policy statement will offer a welcome guide to the bank’s latest thinking on the impact of the COVID-19 pandemic

US index futures marched higher as the repairwork continued in oil markets. S&P 500 index futures rose 12 points or 0.4 per cent. Overnight, the S&P 500 put on 12 points or 0.42 per cent. Gains in tech stocks outweighed heavy falls in airlines after investment guru Warren Buffett dumped all of his holdings in the airline industry.

The Australian energy sector rose for the first time in three sessions as US crude climbed $1.50 or 7.4 per cent to US$21.89 a barrel and international benchmark Brent crude climbed $1.23 or 4.5 per cent to US$28.42. Origin Energy put on 5.5 per cent, Santos 4.2 per cent, Cooper Energy 3.8 per cent and Woodside 3.1 per cent. Elsewhere in the resources spectrum, Newcrest tacked on 4 per cent, South32 2.2 per cent, BHP 1.6 per cent, Rio Tinto 1.6 per cent and Fortescue 1.3 per cent.

News of an increase in drive-through and delivery demand helped lift KFC franchisor Collins Foods 8.7 per cent. The company said same-store sales dipped just 0.9 per cent over the last five weeks as the loss of sit-in food court traffic was largely offset by an increase in takeaways.

Qantas gained 2.3 per cent after announcing it had secured another $550 million in debt funding by mortgaging three 787s. The company now has $1.6 billion of funds in place against ten aircraft to help it survive the COVID-19 shutdown. Fibre cement manufacturer James Hardie rallied 5.3 per cent following news it will close plants in Queensland, New Zealand and the US and suspend its dividend.

Companies presenting at the annual Macquarie Australia Conference – virtual for the first time – fared well. Medical device manufacturer Polynovo jumped 11.7 per cent and enterprise software provider Bravura Solutions 8.1 per cent.  

Healthcare and consumer staples were the only sectors to miss the elevator, easing 0.7 per cent and 0.4 per cent, respectively. ResMed dipped 2.7 per cent, Coles 0.9 per cent ,Fisher & Paykel 0.8 per cent, Cochlear 0.7 per cent and Woolworths 0.5 per cent..

The economic toll from the pandemic continued to mount. Roughly a third of all jobs in the food and accommodation industry have temporarily disappeared, according to fresh Australian Bureau of Statistics data. Activity on building sites crashed to a record low last month as the virus caused a wave of stoppages and cancelations. The Australian Industry Group construction index dived 16.3 points to 21.6, the weakest level since the survey began in 2005. The fall was also the largest month-on-month decline in the survey’s history.

Most Asian markets remained closed for public holidays. Hong Kong’s Hang Seng bounced 0.7 per cent after losing more than 4 per cent yesterday.

Gold deteriorated $9.70 or 0.6 per cent this morning to $US1,703.60 an ounce.

The dollar climbed 0.4 per cent to 64.5 US cents.

What’s hot today and what’s not:

Hot today: Investors in Nanoveu (ASX:NVU) hit the jackpot this morning when the thinly-traded tech company announced its prototype antiviral smartphone case and screen protector eradicated 90 per cent of coronavirus particles in ten minutes. The company’s shares briefly tripled in value before easing to a gain of 206 per cent. Additional testing is taking place in the US. CEO Alfred Chong said the technology was “poised to revolutionise safety for all mobile phone users”.

Not today: Desperate times call for desperate measures. Shareholders in Buddy Technologies (ASX:BUD) face significant dilution after the data monitoring services company struck a deal to issue up to 200,000,000 in stock to an American small cap investor CST as collateral in exchange for $12.5 million in working capital. The share purchase agreement will run for two years and help BUD ride out the pandemic. The company said alternative capital raising initiatives, including a placement, were not available on acceptable terms. The share price slumped 20 per cent.  

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