Aussie shares reversed two days of losses as the promise of fresh fiscal stimulus in Asia overshadowed tensions between China and the US.
The S&P/ASX 200 bounced 73 points or 1.3 per cent to 5570 by mid-session, once again nearing the 5600 level where last week's rally stalled.
Regional markets traded mixed after China unveiled a 3.6 trillion yuan (US$506 billion) package to fire up its economy and a newspaper report said Japan planned a new package worth US$929 billion. China's Shanghai Composite dipped 0.2 per cent in choppy trade, Hong Kong's Hang Seng sagged 1.2 per cent and Japan's Nikkei gained 1.5 per cent. S&P 500 index futures edged up seven points or 0.3 per cent ahead of tonight's Memorial Day market holiday.
Massive injections of fiscal stimulus have supported a post-pandemic rebound in financial markets despite increasingly strained relations between China and the US. Australian stocks retreated at the end of last week as the White House ramped up a war of words and China announced a new security law to clamp down on Hong Kong. US stocks closed mixed on Friday: the S&P 500 put on 0.24 per cent, while the Dow shed 0.04 per cent.
Today's rally lifted all 11 Australian sectors. Gains ranged from 0.6 per cent for materials to 2.8 per cent for tech stocks.
Stocks positioned to benefit from the lifting of travel restrictions led the rally. Online travel agent Webjet climbed 14.7 per cent and Flight Centre 13.2 per cent. Qantas edged up 2.5 per cent and Sydney Airport 1.9 per cent.
Afterpay pushed further into record territory. Barely two months after hitting a pandemic low of $8.01, the buy-now-pay-later darling rose 8.1 per cent to an all-time high of $49. Among the rest of the top five tech stocks, Xero gained 2.3 per cent, Computershare 1.1 per cent, WiseTech 4.4 per cent and Altium 2.1 per cent.
Insurer QBE jumped 5.8 per cent after reassuring investors its exposure to business interruptions in the UK was capped at a net $75 million due to reinsurance. Rivals IAG and Suncorp lifted 1.3 per cent and 0.6 per cent, respectively.
Gains among the market heavyweights of the S&P/ASX 20 ranged from gold miner Newcrest's 0.2 per cent to toll road operator Transurban's 3 per cent. Macquarie Group put on 2.9 per cent, National Australia Bank 2.1 per cent, ANZ 1.6 per cent, Westpac 1.3 per cent and CBA 0.6 per cent. Woodside gained 1.4 per cent, Rio Tinto 0.9 per cent and BHP 0.5 per cent.
The worst performers on the S&P/ASX 200 were mining services firm Perenti Global, down 4.6 per cent, tech company Technology One, down 4.2 per cent and engineering group Monadelphous, down 3.5 per cent.
Oil and gold entered the new week in reverse. Brent crude skidded 428 cents or 0.8 per cent to $US34.85 a barrel. Gold slid $7.20 or 0.4 per cent to $US1,728.30 an ounce.
The dollar marked time at 65.34 US cents.
What's hot today and what's not:
Hot today: The flood of announcements proclaiming new weapons in the fight against COVID-19 has slowed since the ASX began clamping down on some of the wilder claims. Shares in Nanoveu (ASX:NVU) surged 47.1 per cent this morning after the junior tech company got one past the gatekeeper. The cause of the excitement was news the company's antiviral mobile phone screen cover eradicated 99.99 per cent of a coronavirus strain in 30 minutes, according to independent testing in a US lab. The company also said it had commenced an application to the regulators to sell the covers in the US.
Not today: Softening almond prices and a 13.4 per cent drop in first-half net profit after tax helped drive shares in grower Select Harvests (ASX:SHV) down 12.4 per cent. NPAT dropped to $17.4 million over the first six months of the financial year, down from $20 million over the same period the previous year. In addition, the prospect of a record crop this year in the US and the demand impact of COVID-19 have dampened the outlook for almond prices. The board declared a full-franked dividend of nine cents per share.