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Markets Live, Tuesday, 19 May, 2020 - The Sydney Morning Herald
The ASX has closed 1.8 per cent higher, driven by a commodity price surge and new hopes of a coronavirus vaccine.
June Bei Liu, portfolio manager at Tribeca Partners, said optimism returned to markets as it looked more likely that a vaccine would soon become available. And Chinas recent offers to cooperate an investigation into the COVID-19 outbreak helped ease fears of escalating tensions. Sharp price rises were seen in sectors worst hit by the lock downs, such as airplane makers. It is just the optimism that is driving up the market at this point, Ms Liu said. Some defensive [stocks] are being sold off now to fund buying...I am not seeing people betting their entire house on it, but putting a little bit in, and collectively they drive up those sectors. Resources shares were strong again as oil and iron ore prices continued to climb on hopes of increased demand. Energy stocks led the way on Tuesday and were up by a collective 4.21 per cent. The sector has now gained more than 8 per cent since Friday as oil sets new two-month highs. BHP touched its highest price since late February on the way to closing 5.89 per cent higher at $39.85. Rio Tino also nudged a multi-month high before closing up 4.67 per cent at $94.52. Fortescue Metals closed 4.44 per cent higher at $13.87 after setting a new record $13.93 price in early trade. Concrete fibre firm James Hardie was among the 200 index's best performers of the day with an 11.2 per cent rise to $23.82 on a better than expected quarterly result. Richard Morrow, equity partner at EL& C Bailleu and chairman of the Melbourne Mining Club, said the high gold price and weaker Aussie dollar is making Australian mining more attractive, especially for North American money. More speculative money has become available because North Americans have stopped speculating in marijuana and cryptocurrencies, he said. Funding for the Saracen Minerals and Northern Star purchase of the Kalgoorlie Super Pit came from American investors, he added. The big banks were all up, Westpac leading the pack with a 2.15 per cent rise to $15.23. Supermarket Woolworths shed 0.74 per cent to $35.00 to weigh on consumer staples, which joined health stocks in the red.