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The ongoing concerns over the coronavirus outbreak has weighed on the local sharemarket as we move into the month of February. The ASX 200 has started the new week well into negative territory with the index tumbling 106 points or 1.5% to 6910 as the Chinese markets look to reopen from an extended Lunar New Year holiday break at 12.30pm AEDT. The steep declines also follow a weak lead from Wall Street where the Dow Jones fell ~2% on Friday’s session.

Not surprisingly, losses have been broad based and across every sector at lunch with close to 90% of the top 200 stocks in negative territory. The energy sector has been the hardest hit as expectations for global oil demand softens. Santos (STO) is down 4.95% and Woodside (WPL) is falling 2.6%. Oil Search (OSH) is falling even more with a loss of 7.2% but was down more than 10% in early trade as talks broke down with the PNG government to develop a LNG site that it has a joint venture with Exxon Mobil.

The other major drags on the market have come from heavyweight mining and banking names. Falling iron ore prices, which slumped 10% last week, has led to softness among major iron ore players. Fortescue Metals (FMG) is 3.25% lower with losses of 1.9% for Rio Tinto (RIO) and 2.8% for BHP Group (BHP).

The big four banks and Macquarie Group (MQG) have also fallen, contributing nearly 25% of all the entire market’s losses. Macquarie is falling the most with the investment bank slipping 2.8%. Three of the majors are over 2% with Commonwealth Bank (CBA) faring slightly better with a decline of 1.1%. Westpac (WBC) confirmed it is facing a class action in the US over the WBC’s disclosures over alleged money laundering dating back to Nov 2015.

China facing stocks are among the other major decliners with dairy/infant formula stocks falling sharply. The a2 Milk Company (A2M) is 4.3% lower while goat milk company, Bubs Australia (BUB) is 8.6% weaker. Safe havens such as gold are among the only advancers with Northern Star (NST) 3.1% higher and Evolution (EVN) up 2.3%.

The Aussie dollar is back around 67 US cents after lows near 66.8 US cents. Home prices also lifted across all capital cities in January with Sydney and Melbourne leading gains. So far, 1.6b units have traded worth $2.5b with 215 stocks higher, 914 weaker and 312 unchanged.

Published by CommSec