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It has been another choppy session of trade so far on Wednesday with the ASX 200 index swinging between
losses and gains in the opening few hours of trade. The benchmark index is now down 32 points or 0.5% to 5980 after midday and trading near the lows of the session. It was a soft lead from Wall Street as investors weigh up the fresh spike in COVID-19 cases and how that may impact the speed of the economic recovery.

Local investors will also need to mull over the economic hit to the Aussie economy with Treasurer Josh Frydenberg warning that the Victorian lockdown could cost $1 billion a week, citing Federal Treasury estimates.

With the market now near the lows of the session, there are more decliners than advancers. The weakness is coming from the financials, industrials, health, energy, tech and consumer discretionary sectors. Consumer staples, materials and communications are in positive territory still.

The major banks are softer after announcing that they will extend loan deferrals past the initial cut-off period on a case by case scenario. Commonwealth Bank (CBA) is outperforming with a smaller drop of 0.3%. The remaining big four are down between 1.3-1.6% with Westpac (WBC) falling most.

Gold mining stocks are among the most improved with the precious metal trading at 8-year highs on safe haven demand. Northern Star (NST) is a standout with a gain of 6% after announcing production numbers for the June Quarter and FY20. While production was slightly weaker than its pre-COVID guidance, NST’s balance sheet was strong enough for the postponed interim dividend to be paid on July 16. Saracen (SAR) also provided production numbers, in-line with guidance, and is 2% higher.

In other company news, Afterpay (APT) has resumed trade after successfully raising $650 million from institutional investors at $66/share, a slight discount to its previous close. APT shares are down 2.5%. Splitit (SPT), another payment solutions provider, is 15% higher after sales volumes soared 176% in quarter on quarter growth.

The AUD is slightly lower buying 69.35 US cents with no major economic data due today. So far, 2.8b units have traded worth $3.2b with 520 stocks higher, 608 lower and 295 unchanged.

Published by CommSec