ASX back up 4.4pc in crazy day
THE Australian share market staged a dramatic recovery from its morning losses of as much as 8.1 per cent to finish 4.4 per cent higher yesterday.
After sinking below 5000 for the first time since 2016, the benchmark S&P/ASX200 gained 655 points in the final three-and-a-half hours of trade to finish 234.7 points higher at 5,539.3.
The broader All Ordinaries index closed up 219.8, or 4.09 per cent, to 5590.7.
There was no single reason for the “massive” rebound, said Commsec analyst James Tao.
“I wouldn’t necessarily pinpoint it to any one catalyst,” he said. “There’s a combination of factors.”
In the United States, US House Speaker Nancy Pelosi told reporters that House Democrats and the White House were close to agreeing on a fiscal stimulus package.
US stocks futures turned around, going from indicating a 700-point loss for the Dow to pointing to a 500-point gain. And earlier in the day, the Federal Reserve took steps to inject an unusually large amount of cash into the US financial system to preserve liquidity.
The ASX’S turnaround overshadowed the continued drop in the Australian dollar, which sank below 63 US cents for the first time since 2003.
Since the start of the year it has lost over 10 per cent of its value, going from 70.16 cents at the end of 2019 to trading at just 62.98 US cents at 1719 AEDT yesterday.
Even with the gains, the ASX finished the week down 10.9 per cent, or 676.9 points, and has lost 23 per cent of its value since hitting a record high on February 20.
Healthcare shares were the biggest beneficiary of the late rally, collectively climbing 10.6 per cent as CSL jumped 11.9 per cent to $313.83 and Cochlear rose 21.1 per cent to $216.11.
Consumer shares gained an average of about 6 per cent, with Coles gaining 8.7 per cent to $16.05 and Woolworths rising 6.7 per cent to $37.05.