Share market opens with 3% surge

The ASX has surged by more than 3.0 per cent in early trade after US investors lapped up a Federal Reserve pledge to buy individual corporate bonds.

The S&P/ASX200 benchmark index was higher by 175.9 points, or 3.08 per cent, at 5895.7 points after the first 30 minutes of trade on Tuesday.

The All Ordinaries index was 181.3 points, or 3.11 per cent higher, at 6011.3.

Information technology had the greatest gains, up 4.58 per cent.

Energy stocks were close behind, higher by 4.4 per cent.

Financials also had a fine start, up 3.57 per cent.

Afterpay was a main proponent of the IT sector rise. Its shares climbed 7.35 per cent to $54.92.

In energy, Santos enjoyed a 5.01 per cent gain to $5.45 after signing a gas deal with Gold Fields for its mines in Western Australia.

Shares in Beach Energy did better, however. They rose by 5.72 per cent to $1.57.

The big four banks, as well as Bendigo Bank and the Bank of Queensland, had gains of more than 3.0 per cent.

Mining results were a little more tempered. BHP gained 1.7 per cent to $35.85, Rio gained 1.74 per cent to $98.56 and Fortescue climbed 2.31 per cent to $14.63.

In retail, Harvey Norman was higher by 5.03 per cent to $3.55. The electrical and furniture chain last week reported great first-half sales in Australia.

In the US, Wall Street welcomed the Federal Reserve’s plan to buy individual corporate bonds to help prop up the economy.

The Federal Reserve’s purchases will be part of its $US1 trillion ($A1.5 trillion) bond-buying program to keep lending markets running smoothly, which allows big employers to easily access cash.

They are also the latest reminder the US central bank is doing everything it can to support markets during the coronavirus pandemic, analysts say.

The S&P 500 rose 25.28 points to finish at 3,066.59 – 9.4 per cent below its record set in February.

The Dow Jones Industrial Average gained 157.62 points, or 0.6 per cent, to finish at 25,763.16. The Nasdaq composite added 137.21, or 1.4 per cent, to 9,726.02.

In Australia on Tuesday, the Reserve Bank will publish its June board meeting minutes.

Economists will be looking for any comments about the Aussie dollar’s recent surge and the expected timing of economic recovery.

NSW Treasurer Dominic Perrottet is expected to tell Australia’s most populous state its economy will shrink by 10 per cent this financial year due to the coronavirus crisis.

Unemployment in the state is tipped to reach 7.5 per cent.

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