Aussie shares are improving for the first time in five sessions, with the ASX 200 up 0.8 per cent to 5,259, which goes some way in recouping a small portion of this week’s 4.9 per cent tumble. The local market has slumped by ~20 per cent since the start of the 2020 calendar year as the COVID-19 triggered social distancing measures and closures keep parts of the economy shut.
Energy stocks are standing out, with the S&P/ASX 200 Energy index lifting by 2.9 per cent at lunch. This is thanks to a 19.7 per cent gain in the WTI (US) oil price overnight, which adds to a similar gain on Wednesday. At the start of the week, the price of oil fell into negative territory for the first time ever and slumped by a further 43 per cent on Tuesday. Not only is demand weak due to the temporary shutdown of businesses, the grounding of planes and cars remaining in garages, a lack of available storage for oil has also been a factor for the decline. Origin (ORG) is up 3.6 per cent, Woodside (WPL) is up 2.9 per cent and Santos (STO) which outperformed its peers yesterday, is up by a more modest 2 per cent.
The local market is also being well supported by BHP, FMG, gold miners EVN and SAR together with healthcare stocks including CSL and MSB.
US markets overnight finished with a lack of enthusiasm. The Dow Jones edged higher by just 0.2 per cent after being up nine times as much at one stage. Investors seemed disappointed with leaked reports of poor trial results for a COVID-19 drug by Gilead Sciences. Early in the week, Gilead said it had some early success with a drug called Remdesivir that was initially hoped to treat Ebola patients. Data globally continues to be very challenging as well. Over 26 million Americans have filed for unemployment benefits in just five weeks (~16 per cent of the US workforce) while business activity has slumped in the UK, Japan, eurozone and the US so far this month.
Domino’s (DMP) said that same store sales in Australia has remained consistent post COVID-19 at a national level. The pizza maker warned however that a ‘higher number of stores require short-term assistance than in an ordinary period’.
With a few hours of trade left, all sectors are in negative territory this week. Property trusts have fallen most while defensive utilities have fared best. Pinnacle Investments – a financial services firm – has been the best performer on the ASX 200 this week while Southern Cross Media (SXL) has slumped by 21 per cent and is the hardest hit. The media group behind Triple M and HIT is in the process of raising funds from investors but has only had 15 per cent take up of shares to date.
1.7bn shares have changed hands so far, worth $3.9bn. 610 stocks are up, 416 down and 306 are unchanged.
Published by CommSec