ASX up on news from US

‘Exhausted’ market reverses direction

AUSTRALIA’S turbulent stockmarket has rebounded, finishing more than three per cent higher in a dramatic recovery from early panic selling.

The benchmark S&P/ ASX200 index closed up 179 points, or 3.11 per cent, at 5,939.6 points – despite plunging 3.8 per cent just after it opened.

The broader All Ordinaries index finished up 173.4 points, or 2.98 per cent, at 5995.8.

In percentage terms it was the ASX’s best day since a 3.34 per cent jump on November 10, 2016, following Donald Trump’s election.

But no one was celebrating, given that it came just a day after the second-worst session in ASX history, a 455.7-point, 7.33 per cent crash.

“I think the big story is exhaustion from a few days of tumultuous selling,” said Betashares chief economist David Bassanese.

“I don’t think we’ve found a bottom,” he added, noting there were likely more coronavirus cases to be detected in the United States.

CommSec analyst James Tao says it clawed back ground in morning trade after Mr Trump announced a stimulus package to help US businesses overcome the virus impact.

“The stimulus plan boosted confidence a little, ” he said.

Then the market rallied just after noon, as Chinese markets began to open higher buoyed by a new wave of confidence, he said. The rise could be a combination of factors including a swell of optimism, buying in a dip, or a dead cat bounce a temporary recovery in share prices after a huge fall.