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The Aussie market is rebounding from an initial sharp decline on the open following a sell off on Wall Street where the major US indices all fell more than 7%, to fall to the largest single day decline since the Global Financial Crisis (GFC) in 2008. At lunch, the ASX 200 is now in positive territory as it climbs 82 points or 1.44% to 5843 helped by news that the US would announce fiscal stimulus to boost the world’s largest economy.

The local benchmark index was down ~3.8% at the worst levels of the morning, falling to the lowest levels since December 2018, and it was looking like another day of sharp losses. The ~300 point reversal really accelerated as US futures improved to session highs.

After leading declines yesterday with a 20% fall, the energy sector is today leading the advances. Global oil prices settled to the biggest one day fall since the first gulf war in 1991 which spooked local energy stocks on Monday. Beach Energy (BPT) is climbing 6.8% after a dropping 19% yesterday. Woodside (WPL) is lifting 6% and Santos (STO) is 4.8% higher.

Banks are also recovering and contributing to the broader improvements. The big four banks are now rising as much as 2.4% with Westpac (WBC) the most improved. Tech stocks are also raring higher with buy-now pay-later provider Afterpay (APT) jumping 4.8% while Wisetech Global (WTC) is 4.1% higher.

Defensive stocks are now the major underperformers on the market. Gold miners are experiencing some of the heaviest losses. Northern Star (NST) is 3.7% lower while Newcrest Mining (NCM) is easing 2.5%. Other defensive sectors, utilities and property trusts, are also weaker.

In company news, Qantas (QAN) announced further cuts to flight capacity by nearly 25% for the next six months on routes to Asia, NZ, US and UK. Meanwhile management will be forgoing pay or taking pay cuts for the remainder of the financial year to reduce costs. QAN shares are now 10% higher but is still 35% lower for the year to date.

The Aussie dollar has eased from its highs in the US session and is buying 65.7 US cents. So far, 2.8b units have traded, worth $7.1b with 550 stocks higher, 646 lower and 288 unchanged.

Published by CommSec