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Tightening lockdown restrictions in Melbourne helped send the share market to a one-month low before a sharp rebound.
The S&P/ASX 200 slumped 1.1 per cent to its weakest level since June 30, then reversed to a mid-session gain of seven points or 0.1 per cent as health stocks and miners rallied.
Fragile market sentiment took another hit over the weekend as the Victorian Government sent metropolitan Melbourne into Stage 4 restrictions. The new constraints include a night curfew, a return to remote learning, the closure of childcare centres and some other businesses, and greater powers for the police to enforce rules. The rest of the state will return to Stage 3 restrictions on Thursday. The government this morning reported 429 new cases.
The share market was already on edge following a sharp sell-off on Friday after the spread of the virus appeared to increase through last week. The S&P/ASX 200 dived 123 points or 2 per cent to its heaviest loss in five weeks.
US stock futures traded flat ahead of another big week of corporate reports as a stalemate over a new stimulus package capped buyer appetite. S&P 500 index futures were recently ahead half a point or less than 0.1 per cent. On Friday, the index rallied 0.77 per cent as tech stocks outperformed.
Here, health stocks rose 2.9 per cent, reversing Friday’s loss. Hearing specialist Cochlear climbed 5.1 per cent, the second biggest advance on the index after Viva Energy (+5.4 per cent). CSL gained 3.5 per cent, Pro Medicus 2.4 per cent and Sonic Healthcare 1.6 per cent.
Support came from the major miners and supermarkets. BHP climbed 1.6 per cent, Rio Tinto 1.5 per cent, Newcrest 1.3 per cent, Coles 1 per cent and Woolworths 0.5 per cent.
Shopping centre operators and banks reversed as the Victorian restrictions resurrected fears of retail collapses and a wave of bad debts. Scentre Group slid 5.5 per cent, ANZ 3.7 per cent, NAB 3.6 per cent, Westpac 2.9 per cent, Vicinity Centres 2.9 per cent and Commonwealth Bank 1.9 per cent. Consumer lender Credit Corp fell 8.2 per cent. AMP dropped 3.4 per cent after several brokers cut their outlooks for the wealth manager.
Entertainment and tourism stocks declined. Flight Centre shed 5.5 per cent, Corporate Travel Management 3.7 per cent, Webjet 3.4 per cent, Crown Resorts 2.8 per cent and Qantas 1.6 per cent.
Up in Asia, China’s Shanghai Composite gained 0.8 per cent and Japan’s Nikkei 1.9 per cent. Hong Kong’s Hang Seng shaved off 1.1 per cent
Gold opened above US$2,000 an ounce this morning before easing. Gold for December delivery traded as high as US$2,004.30 before fading to US$1.992.60, still a gain of $6.70 or 0.3 per cent.
Oil began the new week in retreat. Brent crude fell 23 cents or 0.5 per cent this morning to $US43.29 a barrel.
The dollar retreated 0.13 per cent to 71.33 US cents.
What’s hot today and what’s not:
Hot today: Loyalty rewards company IncentiaPay (ASX:INP) hit its highest level since May last year on news of a new strategic partnership. The company will provide content to Paywith Worldwide’s Processing Engine, Offers Marketplace and Syndication Platform and will license Paywith’s platforms. IncentiaPay CEO Henry Jones said the partnership was a “key step in our transformation strategy”. Punters welcomed the deal by lifting the INP share price 100 per cent to 5.2 cents.
Not today: Shares in engineering group Monadelphous (ASX:MND) sank to a four-month nadir on news of a dispute over a fire at Rio Tinto’s iron ore processing facility at Cape Lambert in WA. Monadelphous said it had been notified Rio had filed a writ off summons in the Supreme Court of Western Australia against a wholly-owned subsidiary. The writ alleges Monadelphous Engineering Associates caused the fire during maintenance shutdown services at the plant. Rio is reportedly seeking $493 million in damages. Monadelphous denies the allegations and intends to defend the action. The share price skidded 8.5 per cent.
