Australian shares jump on hope for coronavirus drug remdesivir – ABC News

Australian shares have kicked off the week higher, as markets ignore a spike in COVID-19 infections and, instead, focus their hopes on a drug to combat the virus.
By 12:40pm AEST, the benchmark ASX 200 had risen by 1 per cent to 5,980 points a slight pullback from its opening jump (+1.5pc).
The Australian dollar had lifted (+0.3pc) to 69.7 US cents.
Global sentiment was boosted by US pharmaceuticals company Gilead saying last week, that its antiviral drug remdesivir could help reduce the risk of death in severely ill coronavirus patients.
But those were early results and further rigorous clinical testing is required.
Nevertheless, that was enough to boost Wall Street’s main indices on Friday  the Dow Jones (+1.4pc), S&P 500 (+1.1pc) and Nasdaq (+0.7pc).
Also, remdesivir was approved as a treatment for coronavirus over the weekend by Australia’s Therapeutic Goods Administration.
But Deputy Chief Medical Officer Nick Coatsworth warned it was not a “silver bullet” against the virus.
Spot gold had risen (+0.3pc) to $US1,803.23 an ounce, having retreated from last week’s almost-nine-year high.
Brent crude oil fell (-0.9pc) to $US42.85 per barrel.
Tech and stimulus boosting the market
“Investors are probably less concerned about the virus because most have adopted a defensive skew with mega-cap tech, their key performers,” said Stephen Innes, chief global market strategist at AxiCorp.
What the GDP figures mean for you
What do your neighbour Xin, a mining company in Western Australia and your beautician Sally have in common? They’re all part of a shrinking economy.
Read more
The ASX technology sector has surged by 18.9 per cent since the year began, despite the broader Australian market plummeting by 10.7 per cent.
While investors have dumped airline, travel and energy stocks, they have piled into tech names like Afterpay, Appen and Xero, driving up their share prices to record high levels.
It follows a similar trend in US markets as tech stocks are expected to withstand the health crisis better than companies that rely on face-to-face service, or high oil prices.
Shares in Facebook, Apple, Amazon, Netflix, Alphabet (Google’s parent company) and Microsoft have skyrocketed during the pandemic.
They now make up more than 20 per cent of the value of the S&P 500 index.
The global market rebound, off its March lows, was also driven by governments and central banks pumping trillions of dollars’ worth of stimulus into their collective economies.
Remdesivir has been proven to shorten hospital stays for people with COVID-19.(Reuters: Ulrich Perrey)
“So, while the virus spread in the US is a risk to the outlook, the extremely low positioning outside the mega-cap growth stocks gives investors some comfort to maintain those positions front facing gnarly COVID-19 headlines,” Mr Innes said.
“Not to make light of the issue as the market is clearly concerned about the uptick in COVID-19 cases globally, but given the ample liquidity, backdrop money is finding its way into safer pockets of the market, which continues to support the indices.”
Best and worst performers
Some of the best performing stocks were Sezzle (+17.7pc), Collins Foods (+3.1pc), News Corp (+2pc) and Nine Entertainment (+2.9pc).
Why is the Aussie dollar surging?
The Australian dollar is rebounding back towards 70 US cents even as the nation’s economy is hurtling towards recession. Gareth Hutchens explains why.
Read more
Many of today’s worst performers were gold stocks like Dacian Gold (-17.7pc), De Grey Mining (-13.8pc), plus real estate advertiser Domain Holdings (-3pc)
Dacian shares were hit particularly hard after the company flagged another downgrade to its West Australian operations.
In particular, it mined less gold than anticipated in the June quarter, and was expecting to produce 10,000 fewer ounces of gold (-8pc) in the current financial year.
The major banks were boosting the market, led by ANZ (+2.2pc), Commonwealth Bank (+2.3pc), Westpac (+2pc) and NAB (+1.9pc).
Mining giants also performed well, including BHP, Rio Tinto and Fortescue Metals, up around 1.5 to 2 per cent each.
Shares in aged care facility provider Estia Health have been placed in a trading halt, pending a further statement later today.
It came just hours after the company confirmed two of its staff working at three of its nursing homes had tested positive for coronavirus.
However, Estia said it had “had no known instance of COVID-19 infection amongst its past or current residents at the present time”.
The company also warned investors it would record a significant $124-148 million write-down “primarily on goodwill arising from historical acquisitions”.
Estia shares last traded on Friday at $1.50, having dropped 38.5 per cent since the year started.

Click here to view the original article.