ASX jump on last day of financial year as Wall Street rebounds

Australian shares have clawed back yesterday’s heavy losses, as the turbulent financial year draws to a close.

By 12:40pm AEST, the benchmark ASX 200 index had risen by 1.5 per cent to 5,901 points.

The Australian dollar lifted slightly (+0.1pc) to 68.73 US cents.

It follows a rebound on Wall Street as investors put aside concerns about a deeper-than-feared recession and the number of COVID-19 cases surpassing 10 million worldwide.

As the health and economic crises worsen, markets are betting that Congress or the US central bank will inject even more stimulus into the economy.

“The market believes that the [Federal Reserve] has its back,” Sam Stovall, chief investment strategist at CFRA Research in New York, said.

“If things get really bad, the Fed will step in with additional monetary easing and basically reach into their bag of tricks to do whatever they need to support the market.”

The Dow Jones index jumped 580 points (or 2.3 per cent) to close at 25,596, while the benchmark S&P 500 and tech-heavy Nasdaq lifted by 1.5 and 1.2 per cent respectively.

Ending the fiscal year on a high

Collins Foods was the best-performing stock (+14.5pc), despite its full-year profit dropping 20 per cent to $31.3 million.

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Investors piled into the stock as the company — which runs KFC, Taco Bell and Sizzler franchises in Australia and Europe — will pay a final dividend of 10.5 cents per share, fully franked.

While sales at its European stores have been hit hard by coronavirus lockdowns, its Australian KFC franchises have been enjoying strong takeaway and delivery sales.

Other stocks which performed well include Qantas (+5.9pc), Boral (+5.2pc), and James Hardie Industries (+5.7pc).

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