Aussie shares flirted with a second triple-digit loss in three sessions as doubts about rising coronavirus cases outweighed optimism about reopening the economy.
The S&P/ASX 200 slumped 98 points or 1.7 per cent to its lowest point in nine sessions. The retreat erased Friday’s 86-point rally and dragged the index further from its pandemic-rebound high.
The benchmark index hit 6199 on June 9 following two-and-a-half months of frantic buying as investors took advantage of the pandemic sell-off. The market has struggled ever since as doubts set in over the pace of the recovery, falling as low as 5787 this morning.
This morning’s weakness followed a sour end to last week on Wall Street after a record surge in infections and news several US states were starting to reverse measures to reopen their economies. The S&P 500 slumped 75 points or 2.42 per cent.
US index futures opened deep in the red this morning, but soon turned positive. S&P 500 index futures were recently up eight points or 0.3 per cent.
Locally, investors continued to unwind bets on a swift economic revival after Victoria this morning announced 75 new cases, the fourth-highest daily total since the pandemic began. Travel agents, media companies, airlines and childcare providers were among the leading losses on the index. Webjet fell 6.5 per cent to a five-week low, Flight Centre 6.2 per cent, G8 Education 5.4 per cent, Qantas 5 per cent, Southern Cross Media 4 per cent and Seven West Media 2.2 per cent. Theme park operator Ardent Leisure fell more than 10 per cent at the open before trimming its fall to 6.6 per cent.
Adding to the down-pressure was a host of utilities, industrials and property groups trading without their dividends. Stockland shed 5.5 per cent, Growthpoint Property 4.7 per cent, Transurban 4 per cent , APA Group 3.9 per cent and Charter Hall Retail 3.8 per cent. The payouts helped drag the utilities sector down 2.7 per cent, industrials 2.3 per cent and real estate 2.2 per cent.
All 11 sectors declined. Energy took the biggest hit, falling 3.2 per cent as oil extended last week’s 2.8 per cent decline. Brent crude dropped 70 cents or 1.7 per cent this morning to $US40.32 a barrel. Origin Energy gave up 4.2 per cent, Oil Search 3.9 per cent and Woodside 3.1 per cent.
The big four banks took their leads from Friday’s heavy falls on Wall Street after the Federal Reserve clamped down on share buybacks and dividend payouts. CBA slid 1.5 per cent, ANZ 1.2 per cent, NAB 2.3 per cent and Westpac 1.7 per cent.
The mining majors were mixed. Gold miner Newcrest rallied 0.5 per cent as gold firmed $4 or 0.2 per cent to $US1,784.30 an ounce this morning. BHP lost 2 per cent and Rio Tinto 1.9 per cent.
Fisher & Paykel Healthcare was among the session’s best performers, rising 5.3 per cent after announcing an 18 per cent increase in operating revenue to $1.26 billion on high demand for the company’s nasal therapy for use in treating COVID-19 patients.
Asian markets followed Wall Street. China’s Shanghai Composite eased 0.5 per cent, Hong Kong’s Hang Seng 0.6 per cent and Japan’s Nikkei 1.3 per cent.
The dollar edged up 0.34 per cent to 68.83 US cents.
What’s hot today and what’s not:
Hot today: Gold juniors are racing to cash in on interest in the sector while the price of the precious metal trades near a seven-year high. Auteco Minerals (ASX:AUT) soared 87.5 per cent after releasing the maiden resource for its Pickle Crow gold project in Canada. The company announced a JORC inferred resource of 830,000 ounces at 11.6 grammes per tonne. Executive Chairman Ray Shorrocks said the JORC resource “confirms Pickle Crow is a significant, high-grade deposit with immense growth potential”.
Not today: Shares in Servcorp (ASX:SRV) sank to their lowest level since early April after the serviced office provider announced it was closing more than half of its US outlets. Servcorp will close 12 locations, reducing its US footprint to just ten outlets in New York, Chicago, Houston and Washington DC. Despite the contraction, the company claimed to be looking for opportunities to expand elsewhere in the world early next year. The share price fell as low $2.03 before bouncing to $2.11, a loss of 2.8 per cent.