Investors risk sentiments underpinned by news on the first clinical tests of a coronavirus vaccine. Drug company Massachusetts-based Moderna announced encouraging results in very early testing of an experimental coronavirus vaccine. A Phase 3 trial, the largest and most important to validate the efficacy of a vaccine, should begin in July.
Investors have kept a close eye on vaccine programs of several drugmakers, cheering any positive development amid fears of a second wave of infections as governments start easing restrictions. Investors are hoping that a working vaccine for COVID-19 can be developed and that it will help reassure people and businesses as the economy reopens.
Investors shrugged off the latest escalation in Australia-China trade tensions. China announced tariffs totalling 80.5% on Australian barley imports from Tuesday. Beijing's Ministry of Commerce said it had confirmed dumping by Australia and significant damage on its domestic industry as a result, following an inquiry which began in 2018. The tariffs on barley, which will remain in place for five years, are the latest agricultural commodity to be affected by a deteriorating relationship between Canberra and Beijing.
Travel stocks rallied, with Qantas advance 3.6%, Flight Centre up 2.8%, Helloworld up 4%, and Sydney Airport up 2%.
Improving commodity prices except for gold helped the resources sector to strong gains for a second day as iron ore hit the $US96-a-tonne mark, up 3%.
Shares of materials and resources gains, helped by a surge in iron ore futures as port inventory of the steelmaking raw material in China, the world's top steel producer, dropped to the lowest in more than three years. Fortescue Metals Group smashed Monday's record high, rising 4.4%. BHP Group stock increased 5.6% and Rio Tinto 4.7%.
Energy stocks also gained, thanks to more than 9% jump in Brent crude to $US35.55 a barrel, and more than 11% rise in West Texas Intermediate to $US32.89 a barrel in the US session. Woodside Petroleum rose 4.2%, Santos gained 4.7%, and Oil Search climbed 7.3%.
The big four banks benefited from payrolls data showing Australia's economy may already be past the worst of the unemployment blow. From April 18 to May 2, weekly payrolls rose 0.9%, the Australian Bureau of Statistics said, although the total picture is still negative since the pandemic began. Since March 14, payrolls have fallen 7.3%. Westpac added 2.2%, National Australia Bank 2.1%, ANZ Banking Group 2%, and Commonwealth Bank 1.3%.
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