The Australian share market has risen, following modest gains on Wall Street overnight, after an initial rally was dented by disappointing test results from a potential COVID-19 treatment.
- The Australian share market has risen, led by energy and mining stocks
- On Wall Street, the Dow Jones ended modestly higher while the S&P 500 and Nasdaq finished flat
- Shares in biotech firm Gilead Science slumped on disappointing leaked test results for its antiviral treatment
By 12:30pm (AEST), the ASX 200 index was 0.7 per cent higher at 5,253 points, while the All Ordinaries had gained 38 points to 5,310.
The energy and mining sectors were rising strongly, leading a broad-based rally which had extended to all sectors.
Oil and gas companies Santos (+2.8pc), Woodside (+2.4pc), Beach Energy (+4.2pc) and Oil Search (+4pc) were on the rise.
Among the worst performers were Orocobre (-4.6pc), Challenger (-3.9pc) and Janus Henderson (-3.5pc).
Qantas shares had risen 1.8 per cent to $3.40, despite a warning from the competition regulator it would take swift action if the airline engaged in any anti-competitive behaviour, following Virgin Australia entering voluntary administration.
Virgin’s administrator, Deloitte, said the company owed $6.9 billion to more than 10,000 creditors, following an initial review.
The Australian dollar had slipped slightly, to around 63.5 US cents.
Wall Street gives up gains on drug disappointment
In the US, shares in biotech firm Gilead Science slumped after a report in the Financial Times said its antiviral drug, remdesivir, did not improve the condition of patients with coronavirus.
A leaked summary of a Chinese trial of the drug showed it did not help patients get better more quickly and 13.9 per cent of patients who received the drug died, compared to a death rate of 12.8 per cent for those receiving standard care.
The World Health Organisation said it accidentally posted the results on a website that helps track therapies for the disease.
Gilead said the report did not fairly represent the test results, but its shares closed down 4.3 per cent to $US77.78.
The Dow Jones index lost most of its gains after the report, to end up by nearly 0.2 per cent or 39 points to 23,515.
The S&P 500 index and the Nasdaq both ended flat.
European Union leaders agreed to set up a 1 trillion Euro emergency fund to help economies recover from the coronavirus pandemic.
European shares ended higher with the FTSE 100 putting on 56 points or 1 per cent to 5,827.
Norway’s state-owned oil firm Equinor is the first major oil company to cut dividend payments to investors amid the collapse in oil prices.
West Texas crude continued its recovery after crashing below zero earlier this week, rising 23 per cent to $US17 a barrel.
Spot gold has gained to $US1,732 an ounce.
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26.5 million Americans seek unemployment benefits
Millions more Americans claimed unemployment benefits last week amid the coronavirus economic shutdown.
The US Labor Department says more than 4.4 million people made claims last week.
That was down from 5.2 million in the previous week but it means 26.5 million Americans have sought unemployment benefits since the middle of March, wiping out total job gains since the global financial crisis in 2008.
Economists said the figures indicate a US jobless rate of 10 to 15 per cent, the biggest indicator that the economy entered a recession in a March.
Daniel Zhao, senior economist at Glassdoor, a website recruitment firm said the numbers were worrisome.
“Today’s report shows the labour market is almost certainly pushing into new territory, jolting the unemployment rate up above the Great Recession’s 10 per cent peak and wiping out more jobs than we’ve gained in the recovery,” he said.
Other numbers showed that new home sales fell 15.4 per cent in March, by the most in nearly seven years.
Data firm IHS Markit said its flash US Composite Output Index, which tracks the manufacturing and services sectors, plunged to a reading of 27.4 in April, the lowest since the survey began in late 2009, from 40.9 in March.
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