* Benchmark index posts biggest gain in over 3 years
* PM Morrison says govt to announce stimulus soon
* Top lender CBA snaps 11-day losing streak, up 6%
* NZ benchmark index hits near 4-month closing low (Updates to close)
March 10 (Reuters) - Australian shares bounced back from 14-month lows on Tuesday and logged their biggest gain in more than three years, as investors went bargain-hunting and hopes for global stimulus eased worries about the economic fallout from the coronavirus outbreak.
The S&P/ASX 200 index settled 3.1% higher at 5,939.60 after falling nearly 4% earlier in the session. It dropped 7.3% on Monday in its worst drop since the global financial crisis in 2008.
Henry Jennings, a senior analyst and portfolio manager at Marcustoday Financial Newsletter, said there was a little bit of bargain hunting and people were happy to breathe a sigh of relief after Monday’s sharp sell-off.
Boosting investor sentiment, Australian Prime Minister Scott Morrison said the government would soon announce measures to stimulate the economy, with a local report suggesting the package could be worth about A$10 billion.
Overnight, U.S. President Donald Trump said he would take “major” steps to counter the impact of the virus outbreak, prompting a 2.5% rally in E-Mini futures for the S&P 500 after an early slide.
“It is imperative that policy makers hasten and collaborate to roll out coordinated measures that are emphatic, coherent and timely,” said Vishnu Varathan, analyst at Mizuho Bank.
Meanwhile, oil prices rebounded 7% after their biggest drop in nearly 30 years on Monday, supported by hopes for stimulus and potential U.S. output cuts.
Index heavyweight financials were the top gainers, adding 4.7%. The “Big Four” banks climbed in a range of 4.2% to 6.1%.
Top lender Commonwealth Bank of Australia rose 6.1% after shedding more than 22% in the previous 11 sessions.
Smaller peers Westpac Banking Corp and National Australia Bank advanced 5.2% and 4.8%, respectively.
The energy sub-index rose 3.4% on recovering oil prices, regaining some lost ground after Monday’s 20% drop. Oil and gas explorers Cooper Energy and Beach Energy gained 12.2% and 7.9% respectively.
The mining sector added 4.3%, with heavyweights BHP Group and Fortescue Metals Group rising 6.2% and 6.8%, respectively.
In New Zealand, the benchmark S&P/NZX 50 index fell 1.8% to finish at 10,897.47, its lowest close since Nov. 19, 2019.
Utilities and healthcare firms were the biggest drags, with electricity generator Meridian Energy losing 2.1%, and Fisher & Paykel Healthcare Corp shedding 4.5%.
$1 = 1.5251 Australian dollars Reporting by Sameer Manekar in Bengaluru; additional reporting by Aby Jose Koilparambil; Editing by Subhranshu Sahu