The local bourse has busted out of its trading range to close at a two-month high as share markets around the globe rallied on hopes for a coronavirus vaccine.
The S&P/ASX200 benchmark index finished up 99 points, or 1.81 per cent, at 5559.5 points, while the All Ordinaries index closed up 101.3 points, or 1.82 per cent, at 5658.8.
It was the ASX’s best day since April 30 and its first three-day winning streak since March 24-26.
“Very solid gains, great news for Australian investors,” said CMC Markets chief market strategist Michael McCarthy.
“Some would argue it would be a little disappointing,” he added, given that Wall Street was up three per cent and European markets gained five per cent following promising early results from a small trial of a COVID-19 vaccine being developed by Massachusetts biotech firm Moderna.
The gains leave the ASX at a key inflection point, Mr McCarthy said.
Since April 1 it has traded in a range of about 5,100 to 5,500, and at the upper end of that span in recent weeks.
But the last time it closed above 5,500, on April 30, it plunged five per cent the following day in a massive sell-off.
Mr McCarthy said the ASX had closed between the key levels of between 5,550 and 5,560, and the S&P500 and gold prices were similarly poised to either push higher or much drop lower.
“What happens in the next few days will be very important,” he said.
Energy stocks were the biggest gainers on Tuesday, rising 4.2 per cent for a third straight day of gains in what Mr McCarthy called an “extraordinary, extraordinary move.’
Woodside Petroleum finished up 4.2 per cent, Santos rose 4.7 per cent and Oil Search gained 7.3 per cent after Macquarie described it as the Australia’s attractive large cap stock.
In the materials sector, iron ore miners surged as iron ore prices futures spiked to a five-month high of $US94 a tonne amid concerns the coronavirus was threatening to disrupt exports in Brazil, Australia’s main iron ore rival.
BHP gained 5.9 per cent to $35.05, Rio Tinto gained 4.7 per cent to $94.52 and Fortescue Metals rose 4.4 per cent to an all-time high of $13.87.
James Hardie soared 11.2 per cent to $23.82 after the buildings products manufacturer reported a six per cent increase in full-year profit.
Construction and mining materials company Adelaide Brighton gained 7.5 per cent to $2.58 as shareholders approved a name change to ADBRI Limited and executives announced that trading in March and April had been in line with expectations despite the lockdowns.
Cochlear dropped 3.0 per cent to $183.34 after a federal appeals court in Washington denied its request for a rehearing of a patent infringement case, meaning the hearing implant company will have to pay $US280 million ($A427 million) in damages and interest.
Baby Bunting rose 15.4 per cent to $3.08 after Australia’s largest specialty retailer of baby goods announced its second-half sales growth had continued despite the lockdowns.
All the big banks were higher, with ANZ and NAB both up 2.1 per cent, to $15.44 and $15.49, respectively; CBA up 1.3 per cent to $59.65; and Westpac up 2.2 per cent to $15.23.
The Australian dollar was buying 65.46 US cents, down from 64.32 US cents at the close of trade on Monday.
ON THE ASX:
* The benchmark S&P/ASX200 index closed Tuesday up 99 points, or 1.81 cent, at, 5,559.5 points
* The All Ordinaries closed up 101.3 points, or 1.82 per cent, at 5,658.8 points
* At 1736 AEST, the SPI200 futures index was down 23 point, or 0.41 per cent, at 5,551points
One Australian dollar buys:
* 65.45US cents, from 64.44 US cents on Monday
* 70.33 Japanese yen, from 69.07 yen
* 59.87 euro cents, from 59.59 cents
* 53.50 British pence, from 53.21 pence
* 107.76 NZ cents, from 108.14 cent.