Australian shares have rebounded as global markets recovered from a sell-off sparked by concerns over the deadly coronavirus outbreak.
The benchmark S&P/ASX200 index finished Wednesday up 37 points, or 0.53 per cent, while the All Ordinaries lifted 37.5 points, or 0.53 per cent, to 7,135.9 as most sectors rose.
“There’s been a bit of a relief rally,” said BetaShares chief economist David Bassanese.
“Obviously it’s going to be volatile. Markets could just as easily give it up tomorrow given how the virus plays out.”
Lingering hopes that the Reserve Bank of Australia would cut the cash rate next Tuesday – which would likely drive shares higher – may have been extinguished on Wednesday when the Australian Bureau of Statistics announced that inflation grew just 1.8 per cent in the December quarter, below the RBA’s target of two to three per cent.
Mr Bassanese said he expected that the RBA would still cut the rate, but “it’s probably going to hold off for another month or so”.
On Tuesday the ASX’s Rate Indicator showed the market was pricing in just a 30 per cent chance of a rate cut to 0.5 per cent, down from a 56 per cent chance two weeks ago.
Treasury Wine Estates was the biggest market mover on the ASX on Wednesday, falling 26 per cent to a two-year low of $12.35 after warning a glut of cheap wine in the US had soured its performance there.
At least two brokerages downgraded their ratings for Treasury, whose fall shaved 10 points off the ASX200 index and dragged the consumer staples sector down 2.6 per cent.
Telecom shares were the only other sector in the red, falling 0.1 per cent as Telstra dropped 0.3 per cent to $3.85.
Tech stocks were the biggest gainers, rising 1.7 per cent, as Afterpay rose 3.5 per cent to $37.99 and Xero gained 2.6 per cent to $85.36.
CSL continued its strong performance, gaining 1.1 per cent to $316.09.
The blood products and influenza vaccine maker has risen 14.6 per cent so far in 2020.
The big banks all rose, with Commonwealth up 0.7 per cent to $84.61, ANZ gaining 1.3 per cent to $25.79, NAB rising 0.7 per cent to $25.80 and Westpac up 0.8 per cent to $25.19.
Virgin Money UK climbed 9.4 per cent after reporting that customer deposits grew 1.6 per cent in the three months to December 31.
The mining sector was subdued, rising 0.3 per cent, with BHP climbing 0.6 per cent to $39.34, Rio Tinto up 0.4 per cent to $100.43 and Fortescue Metals down 0.4 per cent to $11.53.
Goldminers were mostly down, with Newcrest and Evolution falling 2.1 per cent and Northern Star down 3.9 per cent.
Mineral sands miner Iluka Resources gained 6.4 per cent and nickel-copper miner OZ Minerals climbed 2.9 per cent as both companies released quarterly production updates.
Ooh Media fell 6.7 per cent after Brendon Cook announced he would step down from the helm of the outdoor advertising company he founded 30 years ago.
The Australian dollar was buying 67.70 US cents, meanwhile, up from 67.59 at the market close on Tuesday.
ON THE ASX:
* The benchmark S&P/ASX200 index finished up 37 points, or 0.53 per cent, at 7,031.5 points.
* The All Ordinaries closed up 37.5 points, or 0.53 per cent, at 7,135.9 points.
* The SPI200 futures index closed up 25 points, or 0.36 per cent, at 6,964 points.
CURRENCY SNAPSHOT AT 1630 AEDT:
One Australian dollar buys:
* 67.70 US cents, from 67.59 US cents on Tuesday
* 73.87 Japanese yen, from 73.70 yen
* 61.46 euro cents, from 61.31 cents
* 51.99 British pence, from 51.80 pence
* 103.58 NZ cents, from 103.23 cents