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The share market had the biggest gain of the year in its sights as the prospect of a US stimulus package before the end of this week lifted US futures.

The S&P/ASX 200 was ahead 104 points or 1.55 per cent mid-session after earlier surpassing a 116-point jump at the start of this month.

The gains came as US futures responded to weekend news President Joe Biden’s US$1.9 trillion coronavirus relief package passed in the Senate. Dow futures climbed 107 points or more than 0.3 per cent, signalling further potential gains following Friday’s 1.85 per cent rebound.

What’s driving the market

A broad rally lifted all 11 ASX sectors after Friday’s volatile US session ended with strong gains. All 20 component companies of the ASX 20 index of heavyweights rose. Miners, supermarkets and consumer stocks led the advance.

US futures climbed after Biden’s American Rescue Plan cleared an important hurdle. A modified version of the stimulus package was passed in the Senate by 50-49 on Saturday, clearing the way for the bill to be signed into law this week.  

“A reconciled bill should be agreed and passed by both houses this week and signed into law by President Biden before the end of the week,” NAB Head of FX Strategy Ray Attrill said. “Views on what it all means for the economy, inflation and with that markets, should dominate proceedings this week.”

Also helping sentiment was strong Chinese trade data yesterday.

“China’s January/February combined trade figures… show export growth in January/February up a stunning 60% on Jan/Feb 2020, well above the 40% expected,” Attrill said.

The Asia Dow rallied 1.03 per cent. China’s Shanghai Composite put on 0.71 per cent, Hong Kong’s Hang Seng 0.47 per cent and Japan’s Nikkei 0.91 per cent.

Going up

US-facing pokie-maker Aristocrat Leisure led the stampede of the heavyweights after jobs data underlined the strength of the US’s economic recovery. Data on Friday showed the American economy created almost twice as many jobs last month as economists anticipated. Aristocrat jumped 4.7 per cent.

A huge swing session for US tech stocks helped the domestic sector. The Nasdaq Composite swung from a loss of 2.6 per cent to a gain of 1.6 per cent. The rebound raised hopes the tech-heavy index had found a bottom after declining more than 10 per cent from this year’s all-time high. Here, Appen rallied 4.8 per cent, Bravura Solutions 4.7 per cent and Altium 2.1 per cent.

The big miners and banks provided the bulk behind today’s move. Rio Tinto climbed 4.3 per cent, Newcrest 3.9 per cent, BHP 3.4 per cent and Fortescue Metals 2.2 per cent. CBA added 2.1 per cent, NAB 1.7 per cent, ANZ 0.9 per cent and Westpac 0.4 per cent.

A relapse in bond yields helped inspire Friday’s US reverse and encouraged select buying of bond proxies here. Woolworths gained 2 per cent, Coles 1.6 per cent, CSL 0.8 per cent, Wesfarmers 0.8 per cent and Telstra 1 per cent.

Gold miners attracted bargain hunting following a rout in the price of the metal that pushed many companies to multi-month lows. Silver Lake Resources rallied 6.7 per cent, Ramelius Resources 3.7 per cent and Westgold 4.9 per cent.

Energy stocks rose with crude following a weekend attack on Saudi oil facilities. Beach Petroleum put on 3.5 per cent, Oil Search 2.7 per cent and Woodside 1.6 per cent.

Treasury Wine Estates soared 7.3 per cent on UK media speculation that French giant Pernod Ricard may be interested in some or all of the Australian maker of Penfolds. The company’s share price has been under pressure since China introduced punitive tariffs that effectively locked Australian winemakers out of one of their biggest markets.

ALS rallied 2.8 per cent after expanding its footprint in the Americas. The testing and certification business announced the acquisition of Investiga, a privately-owned pharmaceutical testing business with operations in Brazil and the US.

Going down

Fewer than one in ten companies on the ASX 200 missed the upswing. Smartgroup took the biggest hit, falling 4.8 per cent as it traded without the right to a dividend. Kogan -1.8 per cent and Northern Star +0.6 per cent also went ex-dividend.

Z1p Co faded to a loss of 4.1 per cent as the BNPL sector continued to wobble amid concerns about valuations. New  Zealand lender Laybuy dropped 2.8 per cent despite declaring it expects revenues and transaction margins to exceed analysts’ expectations. Afterpay slipped 1 per cent.

Santos dropped 1.6 per cent on news its largest shareholder sold around a third of its stake in the energy company. ENN Group offloaded 107.1 million shares, leaving it with a holding of 9.97 per cent.  

Other markets

Oil rallied after Saudi oil facilities came under attack yesterday from Yemen’s Houthi rebels. The Aramco facility at Ras Tanura came under drone and missile attack. Brent crude surged $1.31 or 1.9 per cent to $US70.67 a barrel.

Gold burst back above US$1,700, climbing $7.60 or 0.5 per cent to $US1,706.10 an ounce.

The dollar eased 0.02 per cent to 77.06 US cents.

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