Australian shares end higher on US stimulus, hopes of easing curbs

Australian shares closed higher on Thursday, rebounding from a more than two per cent drop in the previous session, boosted by stimulus talks and hopes of further easing in coronavirus restrictions in the country.

The S&P/ASX 200 index added one per cent to finish at 5,872.9, snapping a three-day streak of losses.

The Australian government announced a A$1.5 billion ($1.08 billion) package to revive manufacturing across six sectors as part of a plan to get the economy out of its first recession in three decades.

Aiding sentiment was a headway made by US lawmakers for a new $2.2 trillion pandemic relief package, which helped Wall Street post an upbeat close and exit the September quarter in black.

"Overnight rebound in Wall Street on talks that the US congress was close on stimulus plans only helps boost the sentiment," said James Tao, market analyst at CommSec.

"Sentiment is a lot more positive compared with just 24 hours ago, and these stimulus talks certainly make a huge difference," Tao added.

Meanwhile, easing of border restrictions between Queensland and New South Wales also helped the market, while low new daily cases in Victoria kept the hopes of a "Covid-normal" 2021 without lockdowns alive.

All three major sub-indexes jumped, with miners leading the pack. Global iron ore mining giants BHP Group and Rio Tinto advanced up to 1.9 per cent and 1.2 per cent, respectively.

Financials were lifted by Commonwealth Bank of Australia and Australia and New Zealand Banking Group, which rose 0.7 per cent and one per cent, respectively.

In New Zealand, the benchmark S&P/NZX 50 index ended 0.6 per cent higher at 11,812.73, boosted by financials and healthcare sectors.

Dairy firm a2 Milk Co continued its losing streak, slipping one per cent to post its lowest close since March 17.