Join our daily newsletter At The Bell to receive exclusive market insights
The market was trudging along in a mostly-uneventful end-of-week session today, but all hell broke loose when President Donald Trump tested positive for COVID-19.
The President confirmed via Twitter that both he and his First Lady have tested positive for the coronavirus after one of his top aides, Hope Hicks, contracted the virus.
The effect on the market was instantaneous. The local benchmark ASX 200 was sitting 20 points down before the news broke, then dropped 50 points in seven minutes. The index closed 1.39 per cent, or 81.4 points, lower at 5791.5 — its lowest point in over a week.
The picture was even more grim on U.S. futures. As the ASX closes for the weekend, Nasdaq futures have plummeted 1.89 per cent, S&P futures 1.62 per cent, and Dow Jones futures 1.67 per cent.
Perhaps the market down under was spared from the worst of the losses given the COVID-19 news dropped in the last hour of trade, but time will tell if the carnage continues after the weekend.
The sell-off rippled across ASX, with all 11 sectors closing red.
Energy stocks were the weakest performers today, with the sector closing a heavy 4.01 per cent lower. Oil Search lost 5.97 per cent, Santos lost 5.47 per cent, and Woodside lost 4.27 per cent. Soul Pattison WH did its best to fight the losses off but ended up closing 0.25 per cent lower.
The biggest swing, however, came from the technology sector. The sector was up as much as 1.9 per cent before the Trump COVID-19 news broke, but immediately spiralled and closed 0.65 per cent lower. Xero held onto its gains and closed 0.77 per cent up, but Afterpay shed 0.99 per cent. Computershare lost 2.16 per cent and WiseTech lost 0.15 per cent.
The heavyweight financials sector was teasing a late-session comeback before the coronavirus news, paring its loss from 1.1 per cent in early action to just 0.1 per cent right before the Trump tweet. Rebound hopes were promptly snuffed and the sector closed 1.3 per cent down.
Westpac led the losses among our big four, down 2.07. per cent. NAB lost 1.91 per cent, ANZ lost 1.78 per cent, and Commonwealth Bank lost 0.5 per cent.
Our big iron ore miners did nothing to ease the blow. Fortescue closed 3.6 per cent lower, BHP retreated 3.22 per cent, and Rio Tinto lost 1.89 per cent.
Alas, whenever the coronavirus grips the market, our gold stocks prove their worth as a safe haven investment. Despite the wider market’s nosedive, Newcrest tacked on 0.81 per cent, Northern Star 0.22 per cent, and Evolution Mining 0.87 per cent. Saracen Mineral Holdings climbed a nifty 0.97 per cent.
Among major Asian indexes, the Asia Dow is currently 0.8 per cent lower and the Nikkei 225 is 0.67 per cent lower. Chinese markets have been on holiday since September 30.
The Australian dollar is slightly lower this afternoon, currently worth 71.6 US cents, 55.58 pence, and 11.94 South African Rand.
Today’s ups and downs
Of course, the buy now, pay later sector (BNPL) has been booming over the COVID-19 pandemic, and fintech company iSentric (ASX:ICU) is the latest stock try to force its way into the space. The company confirmed it is taking on the name of its tech and will become IOUpay, ticker code IOU, next week. IOU offers digital banking and payment service and, of course, a fresh BNPL offering. The company announced the official name and ticker change aftermarket yesterday, and today closed 35.87 per cent up at 12.5 cents a pop.
Meanwhile, stem cell specialist Mesoblast (ASX:MSB) was tumbling before the news of Trump’s infection broke. The company was told by the FDA it needed to conduct another clinical trial for its Remestemcel-L drug in treating steroid-refractory acute graft versus host disease (SR-aGVHD). The news sent Mesoblast shares tumbling 37.2 per cent to close worth $3.19 each.
