Bulls get a shot of adrenaline after the U.S. stimulus agreement throws the ASX a lifeline

March 25, 2020 - 1 week ago
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The arrival of Congressional agreement on a $US2 trillion ($3.3 trillion) American fiscal stimulus package hit the wires minutes before the local share market session ended.

The S&P/ASX 200 Index closed +262.40 points higher, or +5.5% to 4,998, as the White House and Senate reached a deal on a coronavirus stimulus bill.

The ASX bulls got a shot of adrenaline after the White House, and Senate leaders agreed on a massive $2 trillion coronavirus stimulus bill.

The deal, which includes $US250 billion for direct payments to individuals and families, $US350 billion in small business loans, $US250 billion in unemployment insurance benefits and $US500 billion in loans for distressed companies, will go to a Senate vote on Wednesday and could be enacted within days.

Senate majority leader Mitch McConnell said: “This is a wartime level of investment” that would mean “more equipment to the heroes on the front lines”.

“It’s good news for the doctors and nurses in emergency rooms around the country who are waiting for more masks and more funding,” he said.

Back home, the materials sector rebound in iron ore which saw Titans BHP surged +10.21%, while Fortescue Metals gained +5.04% and Rio Tinto advanced +5.37%.

Health care closed red, however, as CSL lost -0.35% and closed flat.

The relative firm performance of precious yellow metal kept the gold stocks bullish streak in motion with Newcrest gaining +6.9%, and Northern Star Resources rose +5.3%.

Meanwhile, Evolution Mining jumped +10.3% while Perseus and Resolute climbed +16.48% and +22.22% respective gains.

Finance stocks continue to hold to their recent gains from Monday’s rebound of the multi-year lows. The “Fab Four” (banks) stage a strong surge with ANZ climbing +11.58%, while the Commonwealth gained +9.47%, Westpac rose +9.24%, and NAB gained +9.65%.

In the tech sector, Xero gained +3.65%, while Computershare rose +7.44%, while Afterpay rollercoaster performance over the past week, surged another +33.81% to close at $15.00, meanwhile, WiseTech underperformed and lost -8.49%.

A late afternoon rally saw supermarket giants Woolworths and Coles climb out of the bearish trenches with Woolworths eking out a +0.66% rise while Coles rose +3.16%.

The Australian Dollar, our local currency is currently buying US$0.6044 (as of writing).

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