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The Australian sharemarket has faded from its third straight better start, with the ASX 200 down by 0.72 per cent to 5,448.6 at lunch. This is despite a solid lead from Wall Street overnight, with the S&P 500 lifting by 3.06 per cent and Nasdaq jumping by 4 per cent thanks to gains from Amazon, Apple and Microsoft.

Losses from energy stocks, financials, BHP, RIO and CSL are the main weights on the Australian sharemarket at midday. A slump of more than 10 per cent in the oil price overnight is weighing heavily on stocks like Woodside (WPL) and Santos (STO).

The International Monetary Fund warned the global economy is set to suffer its biggest blow/worst contraction since the 1930s. This is due to the coronavirus crisis which has triggered extensive lockdowns. The IMF said the overall economic hit could be twice as bad should shutdowns extend beyond June. It expects the Australian economy to shrink by ~6.7 per cent this year, before recovering by 6.1 per cent in 2021.

The earnings season kicked off in the US last night, with mixed results. Johnson & Johnson stood out thanks to improving quarterly sales and a bigger dividend. Demand in its consumer health and pharmaceuticals division has been strong as some stocked up on over the counter drugs and allergy medicines like Zyrtec. It was a different story for US banks however, with both Wells Fargo and JP Morgan Chase slumping after handing down bigger than expected declines in quarterly earnings. This was partly due to both setting aside billions to prepare for potential bad loans in coming months.

Kathmandu (KMD) is up 14 per cent after Norges Bank (Norway’s central bank) bought a 5.054 per cent stake in the adventure retailer. KMD shares slumped by 66 per cent in March. Norges Bank manages The Government Pension Fund of Norway.

Myer (MYR) is surging by 20 per cent. Credit Suisse increased its stake in the department store owner from 6.69 per cent to 7.76 per cent. MYR is still down by ~55 per cent on the ASX Year-to-Date.

OZ Minerals (OZL) said it has not experienced any ‘material impact’ at its mining sites following COVID-19. However, it has deferred ~ $150m in capital and operating costs. OZL is up by 2.9 per cent.

Lynas Corp (LYC) is up 3.5 per cent. The rare earth minerals producer increased production over the March quarter, which helped push sales revenue up ~6 per cent. This was despite subdued production levels in early January and the temporary ‘complete shutdown’ of a plant in March due to a Malaysian government implemented ‘movement control’.

QBE Insurance (QBE) is down 1.4 per cent after completing a ~US$750m institutional placement of ~145.5m new shares at A$8.25 (a 9.5 per cent discount to its last traded price). This increases the number of shares on offer and dilutes the value of each share.

2.2bn shares have changed hands so far, worth $3.3bn. 607 stocks are up, 480 down and 289 are unchanged.

Published by CommSec