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The share market’s four-day wipe-out extended beyond six per cent this morning as traders ignored a tentative rebound in US stock futures.
The ASX 200 dived 149 points or 2.2 per cent to 6718 by mid-session as markets continued to adjust to the prospect of a global coronavirus pandemic. At its low, the index had given up 450 points or 6.3 per cent in four bruising sessions since Thursday’s record close. Today’s fall brought the index back to its weakest point since the first week of the year.
While a rally in US index futures helped the Australian market trim intraday losses yesterday, traders were in no mood to fall for the same trick twice. The index clung near its session low even as S&P 500 index futures climbed nine points or 0.3 per cent. Dow futures bounced 78 points or 0.3 per cent. Overnight, both indices slumped more than 3 per cent after US health authorities warned Americans to prepare for possible disruption as the Covid-19 virus spreads. The Dow’s two-day fall of 1,910 points was the largest points loss in history.
Green was once again scarce on trading screens, with all 11 sectors losing between 1.7 and 3.7 per cent. Defensive stocks fared no better than growth sectors. The S&P/ASX Volatility Index – the local version of Wall Street’s “fear gauge” – climbed 8.3 per cent to its highest level since mid-August at the height of the US-China trade war.
The winners’ list was led by companies reporting earnings. Healthcare company Healius jumped 16.1 per cent after upgrading its profit guidance. Media group Nine Entertainment rallied 7.1 per cent after lifting net half-year profit after tax by 5 per cent to $114.3 million despite weakness in ad markets. Funeral services provider InvoCare put on 8.8 per cent (see more below).
At the other end of the scale, high-flying medical device company PolyNovo sank 17.2 per cent after reporting a half-year not loss after tax of $2.42 million. The share price had quadrupled in less than a year as sales of the company’s skin regeneration products gained momentum.
Woolworths‘ shares dropped 3.1 per cent after make-good salary underpayments increased to $315 million, denting net profit. Lottery company Jumbo Interactive shed 8.9 per cent, tech leader Appen 8.8 per cent following a broker downgrade, and lithium miner Orocobre 8.9 per cent.
Iron ore giant BHP sank 2 per cent to a near four-month low. Rio Tinto shed 2.2 per cent, Fortescue 0.8 per cent and Newcrest 2.5 per cent. Oiler Woodside dropped 3.1 per cent to its weakest level since April 2018.
The banks weathered today’s storm better than most, the big four declining between 1.3 and 2.3 per cent.
Asian markets followed Wall Street south. China’s Shanghai Composite surrendered 0.8 per cent, Hong Kong’s Hang Seng 1.12 per cent and Japan’s Nikkei 1.75 per cent.
Brent crude futures bounced 39 cents or 0.47per cent this morning to US$55.34 a barrel. Gold slid $3.90 or 0.2 per cent to US$1,646.10 an ounce.
The dollar eased 0.15 per cent to 65.92 US cents.
What’s hot today and what’s not:
Hot today: Hands up if you’re excited to learn more people are dying? If your hand is up, there is a fair chance you are a shareholder in InvoCare (ASX:IVC). The funeral services provider’s stock price shot up 8.8 per cent this morning on news that deaths increased 2.9 per cent last year back towards the long-term trend after a drop of 3.3 per cent in 2018. More deaths means more funerals, which helped the company lift its full-year post-tax net profit by 54.6 per cent to $63.8 million.
Not today: Automotive aftercare group AMA (ASX:AMA) briefly lost a third of its market capitalisation this morning after reporting an operating loss and warning trading conditions remain “challenging”. The share price plunged 40 per cent to a near five-year low before lately trimming the loss to 32 per cent. The company reported a decline in repairwork, pressure on pricing and additional costs associated with new vehicle technologies. While reported half-year revenue increased to $396.1 million from $298.1 million, operating profit flipped from a profit of $16.8 million to a loss of $2.6 million due in part to one-off abnormal items relating to acquisitions.
