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A lacklustre week for investors continued with a third straight decline as a renewed lockdown in Victoria and negative leads from Wall Street kept buyers away.
A choppy morning saw the S&P/ASX 200 reach mid-session 23 points or 0.4 per cent in the red at 5990 after two failed rally attempts.
Investors’ appetite for taking on more risk has been tested this week by a second wave of COVID-19 infections in Victoria. The S&P/ASX 200 has given up more than 60 points in three sessions as the Victorian government sent Melbourne and Mitchell Shire back into Stage 3 lockdown and closed the border with New South Wales.
Wall Street has largely shrugged off the steady rise in coronavirus cases in the US, but stuttered overnight after Texas reported a record surge and 36 states recorded growth in cases of at least five per cent on Monday. The S&P 500 slumped 34 points or 1.08 per cent, ending a five-session winning run.
ASX-listed travel and tourism companies hit their rebound peaks in the second week of June and have fallen away over the last month as doubts set in about the pace of the global recovery. This morning, Corporate Travel Management fell 4.5 per cent, Webjet 3 per cent and Qantas 0.6 per cent. Flight Centre touched a one-week low before bouncing 0.6 per cent.
Shopping centre owners and retailers declined as Melbourne’s second shutdown cruelled the profit outlook. Premier Investments sank 3.7 per cent, Vicinity Centres 2.4 per cent, Mirvac 2.2 per cent, JB Hi-Fi 1.7 per cent and Charter Hall Retail 2 per cent.
Resource stocks shielded the market from a deeper loss for a second session. Boosted by rising commodity prices and optimism over improving Chinese demand, the materials sector climbed to its highest level in almost a month. BHP rose 0.3 per cent, Rio Tinto 0.1 per cent and South32 0.7 per cent.
Gold miner Newcrest advanced 1.2 per cent to its strongest level since last October after the precious metal settled at a near-nine-year peak. Northern Star put on 6.5 per cent, Perseus Mining 4.5 per cent and Silver Lake Resource 3.4 per cent.
Supermarkets were boosted by reports Australians were stocking up on provisions as Melbourne re-entered lockdown. Coles rose 2.4 per cent to a 16-week peak. Woolworths added 1.6 per cent and IGA supplier Metcash 2.2 per cent.
Online retailer Kogan set a new record after its recent capital raising was oversubscribed before fading to a loss of 0.1 per cent. Afterpay dipped 2.1 per cent after completing a raising in which founders Nick Molnar and Anthony Eisen sold tens of millions of dollars worth of stock.
US index futures pared gains as Asian markets retreated. S&P 500 index futures were recently ahead five points or 0.2 per cent. China’s Shanghai Composite dropped 0.1 per cent and Japan’s Nikkei 0.2 per cent. Hong Kong’s Hang Seng was flat.
Oil fell after a brief move into positive territory. Brent crude eased six cents or 0.1 per cent to $US43.02 a barrel. Gold trimmed overnight gains, declining $4.50 or 0.25 per cent to $US1,805.40 an ounce.
The dollar drifted 0.1 per cent lower to 69.39 US cents.
What’s hot today and what’s not:
Hot today: The pandemic appears to have been nothing more than an air pocket for buy now pay later companies. A day after Afterpay (ASX:APT) announced triple-digit growth in key metrics, Splitit (ASX:SPT) unveiled its own set of stunning numbers. Sales were up 260 per cent last quarter on the same period last year. Gross revenue for the quarter rose 460 per cent. Shareholders liked what they read, sending the share price up 14.3 per cent.
Not today: The automotive industry has not been as fortunate. Carbon Revolution (ASX:CBR) tumbled 31.5 per cent after the wheel manufacturer warned it expects the pandemic to depress sales growth into the first half of the 2021 financial year. The company will trim its production staff and restructure shifts to reflect the drop in growth expectations.
