ASX bounces back better despite Wall Street bloodbath

In another wild day on the ASX, the local share market has made its biggest gain since 1997, closing 5.8 per cent higher despite reports of a recession.

• Massive breakthrough in virus test
• Qantas slashes most international flights
• New Aldi and Coles limits as Woolies shoppers upset

In another wild day on the ASX, the local share market has made its biggest gain since 1997, closing 5.8 per cent higher despite reports of a recession.

A gain for the ASX200 helped the market to claw back 291 points or 5.83 per cent to 5293.4.

The All Ords added 275 points or 5.43 per cent to 5332.8.

It comes as almost 60 per cent of more than 600 Australian businesses surveyed by Roy Morgan said the economy was in “recession” already, including almost 70 per cent in Queensland.

Investors were on a blue-chip buying spree at noon, lifting the stock market more than two per cent as they snapped up bank, supermarket, healthcare and mining stocks.

At noon, BHP Group was up 8.13 per cent at $27.25 while Rio Tinto rose 5.09 per cent to $81.60.

Investors had been bracing for another black day, with futures at 7am AEDT pointing to a four per cent drop after US equities tanked overnight.

CommSec analyst Steven Daghlian said trading is volatile and unpredictable and will remain so until there is some certainty that the deadly coronavirus outbreak is waning.

The central bank has pumped billions into the financial system and indicated further stimulus could be revealed on Thursday.

The big four banks were all higher at midday.

ANZ and the Commonwealth Bank rose more than three per cent.

Westpac was up 2.94 per cent at $16.45 while NAB gained 1.36 to $16.34.

Digital market boards are seen at the Australian Stock Exchange (ASX) in Sydney.

There have been a stream of profit warnings and trading updates due to the economic uncertainty surrounding the coronavirus outbreak.

Qantas has slashed 90 per cent of international flights and hauled back on domestic routes. After half an hour of trading the carrier was down more than two per cent at $2.95.

Crown gained almost 2.5 per cent to $7.46 after it extended its social distancing plans for gamblers to the Perth casino.

Beverage bottler Coca-Cola Amatil and aged care provider Estia Health suspended earnings guidance amid coronavirus uncertainty.

Coca-Cola dropped 2.4 per cent to $9.78 while Estia retreated more than five per cent to $1.21.

Crude oil dropped nine per cent to 12 per cent overnight as analysts pushed back the time frame for economic recovery.

Santos said it was reviewing all its capital spending plans in light of the collapse in oil prices and will stop all new hiring. Its shares fell 1.06 per cent to $3.71.

At the same time Woodside lifted 2.84 per cent to $18.47.

Goldminers soared, with Newcrest adding 7.92 per cent to $23.43 as Northern Star lifted 19.15 per cent to $10.95.

The ASX 200 finished down 9.7 per cent, on Monday, eclipsing an 8.3 per cent drop on October 10, 2008, during the height of the global financial crisis. The dive put the index back to levels last seen in April 2016.

The Aussie dollar was buying 61.29 US cents at noon today, up from Monday’s 60.96 US cents, which was its lowest level against its US counterpart since 2003.

A poll of 15 experts covering economists, bankers and property representatives released this morning found 13 said they expect the nation to plunge into recession.

“Only a few days before the last RBA cut two weeks ago, 85 per cent of economists said they did not expect a cut and only half thought the ASX 200 would drop by 10 per cent in value,” Finder insights manager Graham Cooke said.

“Within a week, we had a cut and a 20 per cent (ASX 200) drop. This signals the sheer severity and speed of the coronavirus impact.”

NAB’s morning call note says global markets were far from impressed with measures to counteract the economic impacts of the coronavirus on Monday - despite the Fed Reserve cutting interest rates by a full one per cent, and the return of quantitative easing.

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Wall Street had its worst day since 1987. Picture: AP

US STOCK MARKET’S ‘WORST DAY’ SINCE 1987

The US stock market plunged to its worst day in more than three decades as voices from Wall Street to the White House said the coronavirus may be dragging the economy into a recession.

Monday’s 12 per cent drop for the S&P 500 means it has plummeted nearly 30 per cent since setting a record less than a month ago, and it’s at its lowest point since the end of 2018. Losses were steep on Monday (local time), accelerating in the last half hour of trading after President Donald Trump said the economy may be headed for a recession and asked Americans to avoid gatherings of more than 10 people.

The plunge came even though the Federal Reserve rushed to announce a new round of emergency actions before markets opened for trading on Monday. The moves are aimed at propping up the economy and getting financial markets running smoothly again, but they may have raised fears even further. Investors are also waiting for the White House and Congress to offer more aid to an economy that’s increasingly shutting down by the hour.

The Dow Jones Industrial Average plunged 2997 points, or 12.9per cent, and, likewise, the S&P 500 had its worst loss since the Black Monday crash of 1987. It surpassed Thursday’s loss of 10 per cent for the Dow.

Traders work during the opening bell at the New York Stock Exchange. Picture: AFP

The market’s losses in the last few weeks are the steepest since the 2008 financial crisis dragged the economy into the Great Recession. US President Donald Trump and professional investors say the stock market could bounce back strongly as soon as health experts get the virus under control.

The problem is that no one knows when that could be, and broad swaths of the economy are grinding closer to a standstill in the meanwhile, from parked airplanes to the nearly empty restaurant around the corner.

Originally published as ASX bounces back better despite Wall Street bloodbath