ASX Today: ASX caps off worst week since GFC with more losses

The share market's three-session winning run is under threat after doubts over a leading coronavirus vaccine candidate triggered a late swoon on Wall Street.

ASX SPI200 index futures dived 83 points or 1.5 per cent as US stocks collapsed in the final hour of trade. The S&P 500 fell 31 points or 1.05 per cent. The Dow shed 391 points or 1.59 per cent and the Nasdaq 50 points or 0.54 per cent.

The COVID-19 vaccine candidate that on Monday fuelled the US share market's best session in six weeks appeared responsible for last night's setback after a health website published concerns about the vaccine's trial results. The S&P 500 surged 3.15 per cent on Monday after Moderna's vaccine showed promising early results in human trials.

Last night, a STAT News report questioned whether the experimental drugmaker had released enough information to justify the enthusiastic market response. A scientist quoted in the article said the Moderna market release was missing critical data. Moderna shares slumped 10.4 per cent, erasing half of Monday's gains.

Retailers came under pressure following poorly-received earnings updates from Dow components Home Depot and Walmart. Home Depot slipped 3 per cent, Walmart 2.1 per cent, Kohl's 7.7 per cent and Macy's 6.5 per cent. Home Depot said strong first-quarter sales were largely offset by costs related to the pandemic.

Investors kept a wary eye on Washington, where Treasury Secretary Steven Mnuchin and Federal Reserve Chair Jerome Powell testified before Congress. Mnuchin warned lawmakers the US economy risked "permanent damage" if lockdown restrictions continued too long. Powell said four Federal Reserve aid programs will be up and running and by the end of the month,

The S&P/ASX 200 closed at a ten-week high yesterday as hopes for a vaccine for COVID-19 swept global markets higher. The benchmark index put on 1.8 per cent after briefly breaking through 5600 for the first time since the third week of the market meltdown.

Strengthening iron ore prices helped our big miners avoid the worst of the overnight slump in US stock prices. BHP's US-listed stock inched up 0.13 per cent and its UK-listed stock 0.42 per cent. Rio Tinto added 0.78 per cent in the US and 1.03 per cent in the UK. The spot price for iron ore landed in China rose $1.80 or 1.9 per cent to US$97.95 a dry ton.

US oil rose for a fourth straight night as the June contract expired without any of the ructions that characterised last month when West Texas Intermediate prices turned negative for the first time in history. WTI for June ended 68 cents or 2.1 per cent ahead at US$32.50 a barrel. Brent crude eased 16 cents or 0.5 per cent to US$34.65 a barrel. The global benchmark jumped 7.1 per cent on Monday.

Gold climbed after Fed Chair Powell reaffirmed the central bank's willingness to provide further stimulus if the economy needs it. Gold for June delivery settled $11.20 or 0.7 per cent higher at US$1,745.60 an ounce.

Copper hit a two-month high, extending its rebound from the pandemic lows to 22 per cent. Benchmark copper on the London Metal Exchange rallied 0.7 per cent to US$5,326.50 a tonne. Nickel tacked on 1.7 per cent, lead 1.2 per cent, zinc 0.4 per cent and tin 0.5 per cent. Aluminium dipped 0.2 per cent.

The dollar eased 0.1 per cent to 65.3 US cents.


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