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The Aussie market has been unable to maintain yesterday’s positive momentum with local shares back in the red on Wednesday. At lunch, the ASX 200 is 88 points or 1.37% lower at 6347 with investors remaining cautious over the potential economic impacts to the global economy caused by the spread of the coronavirus, even as central banks around the world look to stimulate economies through interest rate cuts. A 0.5% cut by the US Federal Reserve at an emergency meaning wasn’t enough to keep Wall St declining with major US indices falling roughly 3%.

Losses have again been rather broad based with nearly 80% of the top 200 stocks in reverse and nearly every sector in the red. The largest percentage declines have been among the tech, energy and healthcare sectors while materials and utilities are flat or marginally higher.

Banking stocks are also a weight with losses for the majors again weighing on the market. Banks swung from gains to losses yesterday when the RBA officially cut rates to a new all-time low of 0.5%. The big four are all down 2.3% or more and are erasing about 27 points from the ASX 200 index alone. All four have announced they will pass on the
full 0.25% cut which squeezes bank margins and puts downward pressure on profits.

Investment firm, Perpetual (PPT) is 7.8% weaker as it trades ex-dividend. Treasury Wine (TWE) is down 7% as it also trades ex-dividend. Woolworths (WOW) is easing a smaller 2.1% for the same reason.

Energy stocks are lower even with US Nymex prices rallying 0.9% in overnight trade. Woodside (WPL) is a major drag as it falls 2.4% with Santos (STO) and Oil Search (OSH) also weaker by 1.5% or more.

Gold stocks have been among the most improved with a strong rebound in gold prices. The largest listed gold miner on the ASX, Newcrest Mining (NCM) is lifting 3.9% while Northern Star (NST) and Saracen Minerals (SAR) are both improving around 6%.

The Aussie dollar has firmed back to 66 US cents after the December economic growth (GDP) data beat expectations. Quarterly growth came in at 0.5% above estimates of 0.4% with annual growth of 2.2%. So far, 1.3b units have traded worth $3.6b with 303 stocks higher, 754 lower and 271 unchanged.

Published by CommSec