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The Australian sharemarket has slumped to a nine and a half month low, with the ASX 200 down by 2.35 per cent or 153pts to 6,289.9 due to continued coronavirus fears and weak data on China’s economy on Friday. Local stocks are slipping for a seventh straight session and take the losses to more than 930pts or ~13 per cent for the index from the record highs hit just one and a half weeks ago.

All sectors are under pressure at lunch, with over 90 per cent of stocks in negative territory. Energy, mining and financial stocks are among the worst performers.

Figures on activity levels in China’s manufacturing and services sector were well below market expectations on Saturday. Manufacturing PMI fell to 35.7 in February (estimate 45) while services PMI slumped to 29.6 (estimate 50.5). Both readings hit record lows and were well below the optimistic market estimates. This confirms the anecdotal evidence recently that manufacturing slowed significantly as factories remained shut in an effort to contain the coronavirus.

Major banks are sliding by between 3-4 per cent on Monday. Market pricing for a rate cut on Tuesday has jumped significantly, with Bloomberg fully pricing in at least a 0.25 per cent cut by the RBA tomorrow. Lower rates tends to push Net Interest Margins lower for the banks.

Commodity prices slumped Friday, with oil down close to 5 per cent, gold down 4.6 per cent and iron ore sliding close to 2 per cent. Energy and mining stocks are mostly lower so far today, with BHP and RIO down as much as 3 per cent. Fortescue Metals (FMG) is down 10.3 per cent or $1.05 as it trades ex-dividend for its 76c distribution to investors. FMG will pay out ~$2.3bn in dividends to investors. Origin (ORG), Qantas (QAN) and G8 Education (GEM) are also ex-dividend today.

Caltex (CTX) rejected EG Group’s takeover offer, saying that it undervalues the company. CTX said it remains open to further negotiations with the British petrol station operator. Coles (COL) is up 1.8 per cent and one of the few improvers at lunch after receiving a broker upgrade this morning. The supermarket chain slumped by 14 per cent in February however.

Property prices in eight capital cities rose by 1.2 per cent in February (+1.7 per cent in Sydney and +1.2 per cent in Melbourne). Australian manufacturing PMI fell 1.1pts to 44.3 in February (a close to five-year low).

2.2bn shares have changed hands so far today, worth $4.8bn. 173 stocks are up, 1,087 are down and 259 are unchanged.

Published by CommSec