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Travel and energy stocks steered the share market lower as Europe’s struggles to contain a fourth wave of coronavirus dented optimism about the global recovery.

The S&P/ASX 200 finished 43 points or 0.6 per cent lower after earlier losing almost 60 points. Today’s close was the weakest in almost three weeks.

Oil companies, airlines and travel agents declined. Gains in mining and defensive sectors cushioned the market from a deeper fall.  

What moved the market

Sentiment on financial markets turned defensive on Friday after Austria announced a full lockdown, sharpening fears more European nations will toughen regulations to contain an upsurge in Covid-19 cases. Bonds, growth stocks and the US dollar rallied. Oil and cyclical sectors turned lower.

“Market sentiment was dented by news that Austria would go into a 20 day nationwide lockdown with the government also outlining its intention to make vaccination compulsory by February 1st – the first major developed country to do so,” NAB currency strategist Rodrigo Catril said.

“This of course is not just an Austrian story,” he added. “Covid infections are rising at an alarming rate around Europe with other EU governments also introducing restrictions with the risk that they may also need to follow Austria’s drastic measures.”

Germany, the Netherlands, Belgium, Slovakia and the Czech Republic have already introduced tighter measures. European stocks ended lower.

US stocks closed mixed as traders returned to their 2020 playbook and rotated from cyclicals into Big Tech. The Nasdaq put on 0.4 per cent. The Dow sagged 0.75 per cent.  

A rebound in US equity futures helped the Australian market pare its losses. S&P 500 futures rose 12.5 points or 0.27 per cent this afternoon, ahead of a week likely to be dominated by the appointment of a new Federal Reserve Chair and Thursday’s Thanksgiving holiday.

Adding to investor worries, Commonwealth Bank called time on surging house prices. The bank’s economists expect prices to top out next year and slide 10 per cent in 2023. The team predict prices will increase a national average of 22 per cent by the end of this year and 7 per cent next year before rising rates put a halt to the pandemic-era rally.

Winners’ circle

AMP gained 2.64 per cent after opting to keep management of its wholesale office fund in-house. The Trustee Board decided AMP Capital should continue as trustee and manager of the fund as the pick of three management proposals from a shortlist assessed by the board.

A rebound in iron ore and industrial metals on Friday supported mining stocks. Bulk metal prices rallied amid signs of progress in stabilising China’s troubled property sector. Under-siege Evergrande resumed work on several stalled projects.

Nickel Mines climbed 7.98 per cent, Orocobre 4.72 per cent and Pilbara Minerals 5.08 per cen. Fortescue Metals added 2.13 per cent, Rio Tinto 1.74 per cent and BHP 0.36 per cent.

Treasury Wine Estates hit its highest in five weeks following last week’s move to buy a Californian wine maker, then trimmed its gain to 0.08 per cent.  

Defensive stocks gained support as the session advanced. Coles put on 0.72 per cent, Woolworths 0.65 per cent and CSL 0.18 per cent.   

Doghouse

Travel and tourism stocks joined a global retreat from reopening plays. Flight Centre shed 7.14 per cent, Corporate Travel Management 6.02 per cent, Qantas 4.01 per cent and Webjet 3.72 per cent.

Energy stocks followed crude lower. Brent crude hit a seven-week low on Friday and continued to fall this afternoon amid concerns about the demand implications of renewed lockdowns. The international benchmark slid 12 US cents or 0.15 per cent to US$78.77 a barrel.

Beach Energy dropped 4.02 per cent, Oil Search 1.43 per cent, Woodside 1.85 per cent and Santos 2.08 per cent.

Lenders declined as a retreat to the haven of government bonds pressured long-term interest rates. CBA fell 2.06 per cent to a six-month low. ANZ shed 1.98 per cent, NAB 1.19 per cent and Westpac 2.08 per cent.

Biopharmaceutical firm Mesoblast eased 2.33 per cent after securing fresh financing to pay down existing debt and help launch its first product in the US. US fund manager Oaktree Capital will provide up to US$90 million through a five-year debt facility.

Nuix dropped 1.43 per cent after confirming a class action claim had been lodged against it in Victoria. The claim filed by Shine Lawyers alleged contravention of laws regarding corporate disclosures. The analytics firm said it would defend the disputed claim.

Coronado sank 1.3 per cent following the death of an employee at the miner’s Curragh coal operation in Queensland. Operations at the mine have been suspended while authorities investigate.

Other markets

A mixed session on Asian markets saw the Asia Dow fall 0.54 per cent and Hong Kong’s Hang Seng shed 0.35 per cent. Japan’s Nikkei firmed 0.14 per cent and China’s Shanghai Composite 0.65 per cent.

Gold faded US$2.60 or 0.14 per cent to US$1,849 an ounce.

The dollar climbed 0.3 per cent to 72.52 US cents as risk appetite stared to heal.

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