The share market unwound more than two weeks of gains after the international spread of the coronavirus triggered a 'flight to safety' on financial markets.
The ASX 200 slumped 157 points or 2.2 per cent to 6982, positioning the index for its heaviest loss since a 2.3 per cent tumble in early December.
Market sentiment, already fragile after falls in the US on Friday, soured further over the weekend as South Korea raised its health alert to the highest level, and the death toll and number of new infections spiked there and in Italy and Iran. Neighbouring countries to Iran were reported to be closing their borders. The upsurge in new cases dented hopes that the epidemic had been brought under control by quarantine measures in China. The S&P 500 slid 35 points or 1.05 per cent on Friday after the virus contributed to the first contraction in US business activity in four years.
Losses here accelerated after South Korea's Kospi fell 3 per cent and US index futures tumbled more than 1.2 per cent. S&P 500 index futures were recently off 41 points or 1.2 per cent. China's Shanghai Composite shed 0.55 per cent and Hong Kong's Hang Seng 1.22 per cent. Japanese markets were closed for a holiday.
The short list of winners this morning was dominated by gold stocks, a traditional haven in times of economic strife. Saracen Mineral climbed 7.5 per cent to a six-month high, St Barbara 6.3 per cent and Newcrest 4.6 per cent. The precious metal hit its highest level in almost seven years this morning, surging $15.10 or 0.9 per cent to $US1,663.90 an ounce.
The Covid-19 epidemic continued to take its toll on corporate earnings. Shares in BlueScope slumped 7.8 per cent after the steelmaker announced a 70 per cent dive in half-year net profit. The company warned its business performance over this and next month will be "heavily impacted" by the virus. Plumbing supplier Reliance Worldwide crashed 24.1 per cent after downgrading its full-year outlook amid uncertainty about the virus's toll on supply chains and customers.
Fund manager Platinum Asset Management declined 6.9 per cent after reporting net fund outflows of $1.3 billion. Health fund NIB Holdings shed 6.5 per cent on news net half-year profit after tax declined 23.1 per cent to $57.1 million amid higher insurance claims.
All 11 sectors deteriorated. The consumer discretionary sector tanked 3.8 per cent as businesses exposed to discretionary spending took a heavy hit. Sector heavyweight Wesfarmers gave up 4.1 per cent, Tabcorp Holdings 4.8 per cent and Crown Resorts 6.1 per cent.
The energy sector dropped 4.1 per cent as Woodside traded without its dividend, falling 6.6 per cent. Brent crude dived $1.79 or 3.1 per cent this morning to $US56.58 a barrel. Elsewhere in the resources space, BHP lost 2.6 per cent, Rio Tinto 1.8 per cent and Fortescue 1.3 per cent.
The big four banks all dipped between 1.3 and 2 per cent. Companies that reported disappointing earnings on Friday came under particular pressure. Ardent Leisure dropped 15.6 per cent and Medical Developments 9.8 per cent.
The dollar hovered just above the 66 cent level, lately down 0.23 per cent at 66.12 US cents.
What's hot today and what's not:
Hot today: Gold and uranium explorer Alto Metals (ASX:AME) provided a rare glimmer of green on a red day, catapulting 66.7 per cent after the Australian subsidiary of a Chinese miner lobbed a bid. AME shares surged 2.4 cents to 6 cents, just below the takeover offer price of 6.5 cents submitted by Goldsea Australia, a wholly-owned subsidiary of Goldsea Group. The AME board advised shareholders to sit on their hands while it considers its response. The board noted that the offer was subject to several conditions, including due diligence and a tick from the Foreign Investment Review Board.
Not today: A discrete warning about "temporary headwinds" from the coronavirus and trade tariffs was enough to send shareholders in Audinate Group (ASX:AD8) running for the doors. The audio network specialist declared a 20 per cent rise in gross half-year profit to $12.5 million and a 14 per cent increase in revenue to $16.1 million. The share price crumbled 16.6 per cent after the company warned "macro-economic conditions and US tariffs have affected 1H20 and are expected to remain for 2H20, together with potential coronavirus impacts."