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By Soumyajit Saha
May 5 (Reuters) - Australian shares closed higher on Tuesday, as upbeat sentiment following the government’s plans to further ease coronavirus-led restrictions outweighed grim forecasts from the central bank’s policy meet.
The S&P/ASX 200 index ended 1.64% higher at 5,407.1, but traded at only 70% of its monthly average volumes. So far this year, the index has shed 20.41%.
Australia and New Zealand discussed plans to open their borders to allow trans-Tasman travel as they looked to slowly reopen their economies.
“The (developments around) containment of the virus and a rising Aussie dollar are inspiring increased interest from global investors,” said Mathan Somasundaram, portfolio strategist at Blue Ocean Equities.
Investors seem to want to go long on the Australian market as the country has controlled the outbreak well, which will help it in getting less impacted from the threat of U.S. tariffs on China, Somasundaram added.
The market looked past a forecast by the Reserve Bank of Australia — which held its rates at record low of 0.25% — that said the economy would suffer its largest ever contraction in the first half of the year.
A subindex for energy stocks rose over 4%, as higher oil prices lent weight. Woodside Petroleum Ltd and Santos Ltd gained 4.2% and 3.9% respectively.
Mining stock gained more than 2%, with index heavyweights Rio Tinto and BHP Group rising 1.8% each.
Financial stocks also advanced, with all of the “Big Four” banks rising between 1.4% and 1.8%.
The top percentage gainers on the benchmark was Collins Foods Ltd, up 11.63%, as its KFC Australia restaurants showed relatively stable performance during the lockdown.
The number of issues on the ASX that advanced were 987, while 564 declined; a 1.8-to-1 ratio favoured advancers.
In New Zealand, the benchmark S&P/NZX 50 index inched up 0.1% to 10,490.73, helped by gains among financials and utility stocks. (Reporting by Soumyajit Saha in Bengaluru; editing by Uttaresh.V)