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Local shares are easing for a second successive session as tensions with China intensify over local agricultural exports like beef and barley. Local shares fell sharply on the open down 100 points or 2% but has since recovered a portion of those losses at lunch. The ASX 200 is now down 53 points or 1% to 5439, which follows a decline of roughly 2% for major US indices last night. Concerns were raised by leading US infectious disease expert, Dr Anthony Fauci that reopening the US economy too soon could lead to a second wave of infections and further lockdowns in the future.

Losses have been widespread so far with every sector in the red. Tech, property and energy sectors are falling most while communications and materials have seen the smallest declines. Materials have been somewhat supported by improvements for gold miners and Fortescue Metals (FMG) which is 1.8% higher.

The big four banks are weaker with losses towards 1% for three of the majors. Commonwealth Bank (CBA) is faring best and was 1% higher at one stage. CBA is currently up 0.2% after releasing its March quarter update this morning. Q3 cash profit came in at $1.3 billion while operating income was flat and expenses were down 1%. The bank is setting aside $1.5 billion in provisions due to the expected impact of Covid19 and has sold a 55% stake in wealth management arm, Colonial First State (CFS) to US investment firm KKR for ~$1.7 billion.

In other company news, cell therapy company Mesoblast (MSB) has resumed trade after raising US$90 million (A$138m), at a 7% discount to its May 8 closing price, to scale-up the manufacturing of a Remestemcel-L cell therapy treatment to assist respiratory illnesses related to Covid19. MSB shares are down 4.4%.

On the economic front, wages growth has dipped slightly in the March quarter. The annual pace of wages growth has slowed to 2.1% from 2.3%. This is before the lockdowns at the end of March. Monthly consumer confidence for May rebounded to lift 16% to 88 points but a result below 100 represents more pessimists than optimists. The Aussie dollar is relatively steady buying 64.7 US cents.

So far, 1.5b units have traded worth $2.9b with 335 stocks higher, 682 weaker and 348 unchanged.

Published by CommSec