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The share market crashed to its lowest point since late 2012 as the prospect of a major recession triggered panic selling.
The ASX 200 tumbled more than 8 per cent in early action. The benchmark index bottomed at 4403, a level last seen in November 2012 or four Prime Ministers ago, before paring its fall to 348 points or 7.2 per cent. The plunge extended the market’s retreat from its February peak to 2,760 points or 38.5 per cent.
The carnage followed yesterday’s federal government decision to shut down indoor venues, including pubs, clubs, gyms, cinemas, casinos and churches, to contain the spread of the Covid-19 virus. Prime Minister Scott Morrison warned the closures could persist for six months, bringing significant parts of the economy to a standstill and potentially throwing thousands of people out of work.
The already-gloomy prospects for the day dimmed further after a trillion-dollar US stimulus package stalled in the Senate, sending US index futures sharply lower. Dow and S&P 500 futures tanked 5 per cent, hitting their down-limits before staging a modest recovery. S&P 500 futures were lately off 100 points or 4.4 per cent.
A Senate vote on a rescue package tied at 47-47, well short of the 60 votes needed to pass. Democrats who voted against the bill complained it helped Wall Street more than Main Street. Senate Majority Leader Mitch McConnell later said the two sides were “very close” and would vote again tonight.
All 11 Australian sectors fell at least 2.3 per cent during the latest in a string of horror sessions for investors since markets came to terms with the economic implications of the coronavirus pandemic. The Small Ordinaries index of smaller companies dived 10.2 per cent.
The potential for a surge in bad debts at a time of record-low interest rates sent the financial sector down 10 per cent to its lowest point since October 2011. The big four banks rang up a fresh round of unwelcome milestones. NAB sank 10.2 per cent to a level last seen in 1996, Westpac 10.2 per cent to a 17-year low, ANZ 9.1 per cent to an 11-year low and Commonwealth Bank 8.5 per cent to its weakest point since August 2012.
Just seven companies on the benchmark index resisted the downdraft. Gold miner Newcrest was the best performer with a rise of 3.7 per cent. Besides another trio of gold miners, Healius edged up 0.9 per cent, Cochlear 0.6 per cent and Corporate Travel 1.4 per cent.
There were breath-taking falls at the other end of the index: Southern Cross Media down 32.7 per cent to an all-time low, Credit Corp Group down 30.3 per cent, Pendal Group 28.2 per cent and G8 Education 25.6 per cent.
The tech sector hit an all-time high last month but has since collapsed by almost half. Afterpay was once again singled out for particularly brutal treatment, falling 34.8 per cent amid speculation about the likelihood of jobless Millennials meeting payments. Altium shed 8.5 per cent and Appen 6 per cent.
Asian markets were mixed. China’s Shanghai Composite gave up 2 per cent and Hong Kong’s Hang Seng 4.2 per cent. Japan’s Nikkei edged up 0.1 per cent.
Oil started a new week on the back foot. Brent crude dropped 76 cents or 2.8 per cent this morning to $US26.22 a barrel. Gold jumped $9.30 or 0.6 per cent to $US1,493.30 an ounce.
The dollar sagged 1 per cent to 57.38 US cents.
What’s hot today and what’s not:
Hot today: Junior explorer Chalice Gold Mines (ASX:CHN) hit a nine-year high after announcing “outstanding” first-up drilling results from its 100 per cent-owned Julimar project in WA. The first hole hit a massive sulphide zone containing nickel, copper, palladium and platinum. Managing Director Alex Dorsch said the company was well funded and had three more high-priority targets to test in the current program. The share price surged temporarily doubled before easing to a gain of 87.1 per cent.
Not today: Theme park owner Ardent Leisure can’t take a trick. Just when business was recovering after the Dreamworld disaster in 2016, along comes a summer of bushfires and floods, followed by a coroner’s report slamming the operator for inadequate safety practices. The coronavirus pandemic completes a hat-trick of setbacks for the company, which this morning announced it was closing Dreamworld and Whitewater World from today in line with advice from the Queensland and federal governments. Shares that traded at $1.65 in January were this morning on offer at 13 cents.
