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The Aussie market has started Friday in the red following another session of heavy selling on Wall Street. The ASX 200 fell as much as 3.4% or 202 points within the first hour of trade but has since picked itself up off those lows. Around lunch, the benchmark index is 120 points or 2% lower at 5,940. It is a second successive day of declines after a strong seven session winning streak to start June.

Investor concern is growing for the potential of a second wave with evidence in the US of several states experiencing spikes in new cases as lockdown restrictions ease. Markets are also still responding to caution by the US Federal Reserve in terms of the expected pace of the economic recovery. Over the past few months, global markets have seen significant improvements, including the ASX’s own ~32% rally since lows were hit on 23 March.

Some of the hardest hit sectors are those that benefitted most on the recovery rally. Today the banking, energy, retail and travel stocks are among the largest decliners. While more defensive oriented sectors such as utilities, staples and health are performing better. Gold miners are also seeing some improvements.

TPG Telecom (TPM) is also lifting 1.5% with the internet provider announcing it would look to pay a special dividend of $0.49-$0.52/share if its proposed merger with Vodafone Australia is approved by its shareholders. The Extraordinary General Meeting (EGM) to decide on the merger will be held virtually on 24 June and payment will be made prior to the merger’s implementation.

Buy-now pay-later provider ZipCo (Z1P) is down along with its peer Afterpay (APT). Z1P shares have slipped 6% at lunch even after the release of another month of revenue growth in May. Transaction volumes for the month jumped 63% to $189.3 million with revenue climbing 78% on the year before. The number of customers and merchants both improved with no major lift in hardship assistance requests experienced. ZIP is still up ~290% since its lows in March.

Like the local equity market, the Aussie dollar is also in the red but not by the same magnitude. The local unit has eased to 68.25 US cents with no major economic data due locally.

So far, 3.3b units have traded worth $4.8b with 110 stocks higher, 1,219 weaker and 236 unchanged.


Published by  CommSec