* Australia c.bank urges ongoing stimulus for economy
* Mining stocks mark best quarter on record
* Collins Foods top gainer in ASX benchmark (Updates to close)
By Pranav A K
June 30 (Reuters) - Australian shares rose on Tuesday after the country’s central bank played up prospects of fresh stimulus and as employment continues to recover from the lockdown, although a spike in COVID-19 cases globally and at home kept gains in check.
The S&P/ASX 200 index jumped as much as 2.4%, but pared some gains to finish 1.4% firmer at 5,897.90. The benchmark was up nearly 17% for the quarter, marking its best quarter since September 2009.
Reserve Bank of Australia Deputy Governor Guy Debelle said the economy will need “considerable” support for some time, adding it would be a “problem” if the government ended fiscal stimulus in September as initially flagged.
Meanwhile, domestic employment continued to pick up gradually after the huge losses caused by the coronavirus lockdown, recovering around 30% of the jobs initially shed.
Brad Smoling, managing director at Smoling Stockbroking, warned that there is going to be a pretty big reversion as “we’re seeing the results of government interventions and stimulus hopes in the market right now.”
“It’s all fairy dust, for lack of a better word. Once the reality kicks in that stimulus is starting to wear off and companies are in bad shape, the market will have to come off.”
Sentiment got a further boost after data showed that factory activity in China, the country’s top trading partner, had expanded at a stronger pace in June.
Financials stocks underpinned the bullish sentiment, gaining 1.2% after Debelle said Australia does not need negative interest rates.
Mining stocks, whose biggest export market is China, rose 1.3% and marked their best quarter on record, while the energy sub-index jumped 4.3% and recorded its strongest quarter in 12 years.
Collins Foods Ltd surged 12.7% on higher full-year results and was the top percentage gainer on the benchmark.
New Zealand’s benchmark S&P/NZX 50 index recorded its best quarter ever. The index closed up 1.8% at 11,451.05, its highest level since June 9.
An ANZ bank survey showed that New Zealand’s business sentiment improved slightly in June over the previous month. (Reporting by A K Pranav in Bengaluru, Editing by Sherry Jacob-Phillips)