May 25 (Reuters) – Australian shares rose on Monday as the global easing of pandemic-induced restrictions fuelled optimism of an economic recovery, though heightened tensions between the United States and China over a new Hong Kong security law remained in focus.
The S&P/ASX 200 index was up 1.58% at 5,583.7 points, as at 0055 GMT, recouping all of the losses in the past two sessions. The benchmark ended 1% lower on Friday.
With fewer than 20 fresh COVID-19 domestic cases these days, Australian states are pressing ahead with a three-stage plan to remove most social restrictions by July.
Global sentiment got a lift on reports that Spain is also easing some lockdown measures in Madrid and Barcelona, while India is set to resume domestic flight services on Monday.
However, investors also awaited developments on the Sino-U.S. relations as the new security law for Hong Kong raises tensions between the world’s largest economies.
White House National Security Adviser Robert O’Brien said on Sunday that China’s proposed national security legislation for Hong Kong could lead to U.S. sanctions and threaten the city’s status as a financial hub.
Financial stocks rose 1.61%, led by QBE Insurance Group Ltd after a gain of 4.27%. Meanwhile, the “Big Four” banks traded higher between 1% and 2.7%.
Shares of IOOF Holdings Ltd rose as much as 5.5% after the company said the class action filed against it in April 2019 had been discontinued and it was not making payments against the claim.
Energy stocks rose 2.45% led by Viva Energy Group Ltd, up 4.78%, followed by Origin Energy Ltd, gaining 3.14%.
Meanwhile, shares of media company Nine Entertainment Co Holdings gained as much as 4.4% after the company said it would sell its New Zealand media unit Stuff Ltd to local management in a bid to maintain ownership within the unit.
Across the Tasman sea, New Zealand’s benchmark S&P/NZX 50 index rose 1.1% to 10,779.7.
The top percentage gainers on the benchmark were Oceania Healthcare Ltd, up 5%, followed by Z Energy Ltd , which climbed 3.93%.
Reporting by Shreya Mariam Job in Bengaluru, Editing by Sherry