The Australian sharemarket has kicked off the new week and second last day of the financial year significantly lower, with the ASX 200 down 1.2 per cent to 5,834.4. This follows a 2.4 per cent slump for US markets on Friday, weaker Dow Futures and the spread of COVID-19.
Some of the buyer enthusiasm which pushed markets higher in April, May and early June seems to have dried up for the time being with a spike in COVID-19 cases in parts of the US, Japan and Victoria threatening the reopening of the global economy. In fact both Texas and Florida are rolling back reopenings, Texas diagnosed 9,000 infections in one day, closed bars and restaurants are now required to halve dining capacity. Japan had a record lift in cases while Victoria has recently recorded the largest single-day increase in more than two months. This threatens business returning to normal.
All sectors are losing ground at lunch. Energy stocks are down 2.6 per cent following a decline in oil prices, banks are down by ~2 per cent and property stocks are some of the hardest hit.
A reason for the decline in property stocks is that dozens of companies are trading ex-dividend in the sector. This includes Stockland (SGP), GPT, Mirvac (MGR), Goodman (GMG), Charter Hall (CHC), Dexus (DXS) and Vicinity Centres (VCX). Other stocks like APA Group (APA) and Transurban (TCL) are also losing ground.
Gold miners are the only stocks lifting as a group. This follows another improvement in the price of the yellow metal and demand for safe haven commodities remains robust. The price of gold is hovering around seven and a half year highs and has surged by ~20 per cent in three months. Copper prices continue to lift on supply concerns following the temporary closure of Chile’s Codelco mine (the world’s largest copper producer).
Infigen (IFN) entered a trading halt due to the renewable energy firm receiving revised bids from potential buyers UAC Energy and Iberdrola. IFN has resumed trade and is now up 3.1 per cent.
Southern Cross Media (SXL) said it is eligible for $10m in funding from the Federal Government as part of its Public Interest news Gathering program, which supports commercial TV, radio and newspapers in regional Australia. SXL shares are down 5.3 per cent.
Travel stocks are continuing to struggle as COVID-19 holds tourism back. Shares in Qantas (QAN), Sydney Airport (SYD), Flight Centre (FLT), Webjet (WEB) and Corporate Travel (CTD) are all losing ground. Air New Zealand (AIZ) provided an update, saying it only carried 67,000 passengers in May, compared to 1.28 million a year earlier.
3.4bn shares have changed hands so far today, worth $3.1bn. 406 stocks are up, 828 down and 364 are unchanged.
Published by CommSec