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Financials

Australian shares rise on financials, but poised for record monthly drop

* Financials rise to near 2-week high in Australia

* Whitehaven Coal hits over one-month high

* NZ shares up; govt extends state of national emergency

March 31 (Reuters) - Australian shares extended gains on Tuesday, helped by quarter-end balancing and on measures to slow the spread of the coronavirus outbreak and contain its economic impact, but the benchmark index was poised for its biggest ever monthly drop.

The S&P/ASX 200 index rose 3.3%, or 173 points, to 5,353.40 by 0113 GMT after Monday’s 7% jump. For the month, it was down 17.5%, reflecting investors’ fears of a deep recession due to the pandemic.

“The move is mainly due to quarterly macro trade adjustment driven by asset allocation. The macro trade is buying the market exposure,” said Mathan Somasundaram, market portfolio strategist at Blue Ocean Equities.

Helping investor sentiment further were Australia’s A$130 billion wage subsidy stimulus package and China data showing factory activity unexpectedly expanded in March after contracting sharply to a record low.

Leading gains on the benchmark were financials, which rose as much as 5.9% to a near two-week high, with the “Big Four” banks adding between 6.2% and 7.2%.

Jefferies said, “The real risk for Australian banks remains that an unemployment spike drives a huge collapse in the housing bubble,” but the wage subsidy relieved some of these pressures.

Energy stocks climbed, with Whitehaven Coal , the country’s largest independent coal producer, jumping 11.5% to a more than one-month high. Cooper Energy rose about 6%.

Healthcare stocks gained 2.7%, boosted by a near 12% rise in hearing devices maker Cochlear Ltd.

Meanwhile, miners lost ground, with gold stocks shedding the most. Newcrest Mining dropped 3.3%, while Evolution Mining dipped 7.2%.

Rare earths producer Lynas Corp said it would follow the Malaysian government’s order to extend movement restriction by two weeks. Production at the company’s Malaysian processing plant has been halted since March 23.

Across the Tasman Sea, New Zealand’s benchmark S&P/NZX 50 index rose 3.4%, or 328.48 points, to 9,989.67.

NZ-listed shares of Australia and New Zealand Banking Group gained 12.5%, while Fletcher Building rose 5.6%.

New Zealand is extending the state of national emergency by seven days to help stop the spread of the coronavirus outbreak. (Reporting by Shreya Mariam Job in Bengaluru; Editing by Subhranshu Sahu)

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