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Local shares are again the red on Tuesday with the ASX 200 following further declines on Wall Street overnight. Towards lunch, the ASX 200 is sliding for a fourth consecutive session, down 52 points or 0.9% to 5,770.

US markets are easing on a number of potential risks including a spike in COVID-19 cases across the US and Europe. This could lead to further lockdowns or restrictions and impact the economic recovery. US coronavirus deaths are also nearing the 200,000 mark. There are also political risks including the upcoming US election in November, the stalled progress for further US fiscal stimulus and USChina tensions.

The COVID concerns have particularly weighed on commodity prices and therefore energy and mining stocks. Global oil prices slumped at least 4% overnight on demand concerns while also being hampered by the strength in the USD. Commodity prices generally have an inverse relationship with the greenback. The likes of Santos (STO) and Oil Search (OSH) are down 3% and 2.6% respectively.

Iron ore also fell 4.2% which is weighing on the major mining names of BHP Group (BHP), Rio Tinto (RIO) and Fortescue Metals (FMG). FMG and RIO are 3% weaker while BHP is falling 2%. Even traditional safe havens, like gold are trading lower. Northern Star (NST) is tumbling 5%.

Financials are another drag for the broader market as the big banks are again in reverse. Commonwealth Bank (CBA) is slightly ahead of its big 4 peers, easing 1.2% while the remaining three are declining at least 2%.

While those stocks are putting plenty of downward pressure on the broader market, improvements for
technology, healthcare and consumer staples are helping to ease the losses. Xero (XRO) is up 3.8% with a similar 3.3% lift for Appen (APX). Afterpay (APT) is also 1.9% higher. Supermarket giants, Woolworths (WOW) and Coles (COL) are gaining 1.7% and 1.3% each.

The Aussie dollar has fallen sharply from highs of 73.25 US cents yesterday on the back of the drop in commodity prices and a speech by RBA deputy governor Guy Debelle, and now buys 72.07 US cents. So far, 2.7b units have traded worth $2.8b with 290 stocks higher, 852 weaker and 339 unchanged.

Published by CommSec