Australia: Shares rise as vaccine hopes lift energy, travel stocks

[BENGALURU] Australian shares closed higher for a fourth straight session on Tuesday as progress in the development of a Covid-19 vaccine raised hopes of a swifter recovery in the global economy and bolstered hard-hit travel, tourism and energy stocks.

The S&P/ASX 200 index, however, ended 0.7 per cent higher after jumping 2.2 per cent to a more than eight-month high in early session as a slump in overnight bullion prices weighed on gold stocks.

Risk appetite got a boost globally after US drugmaker Pfizer and German partner BioNTech said a large-scale trial of their vaccine showed it was more than 90 per cent effective in preventing Covid-19.

"Investors appeared to have switched out from big tech into the long-underperformed traditional industries last night, kicking off a new chapter of sectoral rotation," Margaret Yang, a strategist with news and research website DailyFX, wrote in a note.

"How to strike a balance between an escalating pandemic wave against vaccine hopes will likely be a main theme for trading till year end."

Tourism and travel-related stocks such as Flight Centre Travel Group, Sydney Airport Holdings and Qantas Airways rose more than 8 per cent each on the news.

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign UpVIEW ALL

Energy stocks, which have been among the worst hit by the pandemic due to a plunge in fuel demand, surged as much as 8.9 per cent to record their best session since early April.

Nearly all stocks on the sub-index were higher, with Oil Search and Beach Energy climbing more than 14 per cent each.

Heavyweight financial stocks rose to their highest levels since June 10, with the "Big Four" banks adding between 3 per cent and 7.6 per cent.

National Australia Bank ended 7.6 per cent higher, overtaking Sydney-based rival Westpac Banking as the country's second-largest lender based on market value.

However, tech and consumer stocks, which have so far benefitted from an online shopping boom and panic buying triggered by the pandemic, dropped more than 3 per cent.

Across the Tasman Sea, New Zealand's benchmark S&P/NZX 50 index hit a record high before closing marginally higher at 12,612.39.

Investor attention will turn to country's central bank meeting on Wednesday, where it is expected to unveil a new monetary policy tool to drive borrowing costs for lenders lower and maintain the official rate at 0.25 per cent.

REUTERS