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ASX rallies 4.2% after see-saw session

Derek Rose
Australian investors face another volatile day on the ASX after many businesses shut down

Australia's share market has rallied from a near eight-year low with the US Federal Reserve taking drastic action to shore up markets and new coronavirus cases seeming to plateau in Italy.

The benchmark S&P/ASX200 gained 122 points in the final half hour of trade to close Tuesday up 189.7 points, or 4.17 per cent, at 4,735.7, while the All Ordinaries index climbed 189.2 points, or 4.15 per cent, to 4,753.3.

"A good day on the markets," said Pepperstone head of research Chris Weston. "It's been pretty lively. The bulls have roared back.

"We've got a point where it seems like there's been a change in sentiment. I think something shifted in the market last night. People were searching out good news. We haven't seen that in a long time."'

In the United States the Fed said it would begin unlimited quantitative easing, including buying corporate bonds, while in Italy the number of new coronavirus cases declined for a third straight day.

"The Fed brought up the big guns last night, they really did," Mr Weston said.

"It does feel like after so much pessimism, so much negativity, so much emotion, we're trying to look for reasons to buy, and that's good news."

But Mr Weston cautioned that he was not calling the bottom, following 22 days of carnage that saw the ASX200 drop 36.8 per cent as the coronavirus crippled economies and shut down businesses around the world.

Still, every sector was up at least one per cent on Tuesday, with energy gaining the most, 7.6 per cent, as the price of oil climbed to $US28 a barrel.

Santos rose 20.5 per cent to $3.52, Woodside climbed 5.6 per cent to $16.13 and Oil Search gained 9.0 per cent to $2.05.

Real estate was the second-biggest gainer, rising 7.5 per cent as Goodman Group rose 12.0 per cent, Dexus rose 7.2 per cent and Stockland gained 10.8 per cent.

Woolworths fell 0.7 per cent to $36.18 after it said venue closures, and changes to shopping behaviour at its supermarkets, meant it could not estimate the impact of the virus on its full year financial results.

But Wesfarmers was up 2.1 per cent to $31.68, even as the ANZ/Roy Morgan weekly consumer sentiment measure plunged 27.8 per cent during the week to its lowest in 30 years as consumers increasingly shun the shops.

In the mining sector, BHP rose 5.1 per cent to $28.40, while Rio Tinto gained 1.1 per cent to $79.55 after announcing it would slow operations in Canada and halt some in South Africa because of coronavirus shutdowns.

Goldminers were up as the price of the precious metal rose to $US1,560 an ounce, with Newcrest, Evolution and Northern Star all up between 6.5 and 16.9 per cent.

The big banks were also up, with CBA gaining 5.1 per cent to $57, NAB up 3.8 per cent to $14.40, ANZ up 5.3 per cent to $14.85 and Westpac up 2.9 per cent to $14.51.

Consumer debt company Credit Corp Group was the biggest ASX gainer, rising 45.9 per cent to $9.12, although that still leaves it down 70 per cent on the year.

Seven West Media gained 1.5 cents to 6.7 cents after it said the postponing of the Olympics and AFL competition, along with a falling advertising market, means it must scrap its earnings guidance.

Michael Hill Jeweller dived 14.55 per cent to 23.5 cents after it postponed its interim dividend payment of 1.5 cents per share for six months.

Retail Food Group fell 8.6 per cent to 3.2 cents after the company, which runs Gloria Jeans cafes, Donut King, Crust pizza outlets , scrapped its guidance but noted good sales at some stores.

Meanwhile the Australian dollar was buying 59.39 US cents, up 58.01 from at Monday's close.

ON THE ASX:

* The benchmark S&P/ASX200 index finished Tuesday up 189.7 points, or 4.17 per cent, at 4,735.7 points

* The All Ordinaries closed up 189.2 points, or 4.15 per cent, at 4,753.3 points

* At 1738 AEDT the SPI200 futures index was up 33 points, or 0.7 per cent, at 4,747 points

CURRENCY SNAPSHOT:

One Australian dollar buys:

* 59.39 US cents, from 58.01 US cents on Friday

* 65.65 Japanese yen, from 63.63 yen

* 55.02 euro cents, from 53.93 cents

* 41.05 British pence, from 49.56 pence

* 102.48 NZ cents, from 102.15 cents.