Australian shares are trading lower in noon trading amid cautious sentiment ahead of the federal government’s impending budget update later this week and concerns about rising local coronavirus cases.
The S&P/ASX200 benchmark index was lower by 32.1 points, or 0.53 per cent, at 6001.50 points at 1200 AEST on Monday.
The All Ordinaries index was 34.9 points, or 0.57 per cent lower, at 6110.00.
Local shares started on a tepid note following mixed signals from global markets last week, as investors particularly in the US, weighed the prospect of more fiscal stimulus against fears of further business disruptions as COVID-19 cases rise.
Investors in Australia also remain cautious ahead of key macroeconomic events which include the Reserve Bank minutes from it’s July board meeting, a speech by RBA Governor Philip Lowe and federal Treasurer Josh Frydenberg releasing an economic and fiscal update on Thursday.
However, the market turned lower after the most populous state New South Wales, reported 20 new COVID-19 cases, while neighbouring Victoria recorded another 275 cases.
In the local market, solid declines in energy companies and the financial sector weighed on the indices, but there were gains among miners and utility shares.
Shares in Woodside Petroleum, Origin Energy and Santos were all trading between 2.0-3.0 per cent lower as crude oil prices slipped amid concerns the surge in coronavirus cases is sapping fuel demand even as major crude-producing nations ready increases in output.
Each of the four major banks was also trading around one per cent lower, adding to the negative momentum.
Mining shares managed to buck the trend, with BHP and Rio Tinto trading more than 1.0 per cent higher, although Fortsecue Metals was down 0.6 per cent to $16.28.
The sector also benefited from gains by gold producers, with the precious metal staying above $US1800 per ounce amid continuing concerns about the global economic recovery. Shares in Newcrest, Evolution and Regis Resources were up around 1.0 per cent each.
However, South32 shares were down 1.4 per cent to $2.19 after the diversified miner outlined impairments of $166 million in its full year accounts due to its struggling manganese alloy smelters in South Africa and Australia.
Eclipx Group shares jumped 6.2 per cent to $1.38 after the vehicle fleet leasing company agreed to sell its underperforming Right2Drive business for up to $26.5 million.
Whispir shares jumped nearly 17 per cent to $3.92 after the communications software company said it had added dozens of customers in the June quarter while slashing costs.
The Australian dollar skidded amid the risk-off mood. It was trading at 69.77 US cents at 1200 AEST, a steep decline after lifting above 70 US cents earlier in the session and still lower from 69.86 US cents at Friday’s close.