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Hopes for a coronavirus vaccine helped catapult Australian shares to a nine-week high as investors bet on an economic rebound.

The S&P/ASX 200 surged 108 points or 2 per cent to crack the 5600 level for the first time since the third week of the February-March stock market meltdown. The benchmark index was last trading at 5569 after peaking at 5607.

A new wave of optimism lifted global markets after a US drugmaker announced positive results from a human trial of a potential vaccine for COVID-19. Moderna said all 45 participants in a phase-one trial had developed coronavirus antibodies. More than 100 vaccine candidates are under development around the world. The US company was the first to report data from a human trial.

Wall Street responded to the breakthrough with its biggest rally in six weeks. The Dow jumped 912 points or almost 4 per cent. The S&P 500 put on 3.15 per cent. Asian markets chased those gains this morning. Hong Kong’s Hang Seng rallied 2.1 per cent, Japan’s Nikkei 1.9 per cent and China’s Shanghai Composite 0.7 per cent. S&P 500 index futures were recently down six points or 0.2 per cent.

The rising tide lifted every Australian sector except health and consumer staples, which dipped 0.5 per cent and 0.3 per cent, respectively, as traders rotated into assets more exposed to an economic rebound. The energy sector jumped 4.5 per cent, materials 3.1 per cent and financials 2.3 per cent.

Oil Search led the energy sector rally, climbing 8.2 per cent to its highest level since mid-March. Energy services group Worley added 9.5 per cent, Santos 5.8 per cent and Woodside 4.3 per cent. In the broader resources space, BHP and South32 gained 4.9 per cent and Rio Tinto 4.4 per cent. Fortescue climbed 4 per cent to a new record.  

Shopping centres stood out among the index’s best performers. European group Unibail-Rodamco-Westfield rose 9.8 per cent, Scentre Group 7.9 per cent and Vicinity Centres 6.4 per cent.

Tourism and travel also shone. Qantas climbed 4.1 per cent after announcing plans to restart up to 50 per cent of its previous domestic capacity in July. Webjet added 9.6 per cent and Flight Centre 4 per cent.

ANZ, NAB and Westpac all rose at least 2.8 per cent. The biggest of the big four banks, CBA, trailled with a gain of 2 per cent.

Defensive stocks filled most of the bottom slots on the index. Gold miner Regis Resources sank 4.1 per cent, Silver Lake Resource 4 per cent, Cochlear 1.9 per cent and Fisher & Paykel Healthcare 1.4 per cent.

Agribusinesses came under mild pressure after China followed through on a threat to impose punitive tariffs on imported Australian barley. Elders retreated 0.7 per cent. GrainCorp overcame early falls to rise 0.3 per cent. China announced an import tax of 80.5 per cent for five years. Barley was one of Australia’s top three agricultural exports to China. Trade Minister Simon Birmingham said he was “deeply, deeply disappointed” by the decision.

The breakneck recovery in oil showed no signs of flagging. Brent crude climbed another 27 cents or 0.8 per cent this morning to $US35.07 a barrel. Gold bounced $7.20 or 0.4 per cent to $US1,741.60 an ounce.

The dollar improved less than 0.1 per cent to 65.26 US cents.

What’s hot today

Investors appeared to wake up to the prospects for Emperor Energy (ASX:EMP) after the junior gas producer announced it had appointed energy infrastructure giant APA Group (ASX:APA) to design a processing plant and pipelines for Emperor’s Judith gas field in Victoria’s Gippsland Basin. “Crikey,” the thinking seemed to run. “If APA is involved, this must be big!” Emperor’s share price, which had been slumbering below 2 cents, tripled to 6 cents on the biggest trading volume in years before settling around 4 cents, a gain of 122.2 per cent. APA Group edged up 2.5 per cent.

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