Aussie shares tumble as all eyes turn north
A selling spree hit Aussie shares today at a critical moment for markets globally as the impact of the coronavirus outbreak continues to take a heavy toll.
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THE Australian stock market was a sea of red today amid continuing fears about the economic impact of the coronavirus outbreak.
It came as shares tumbled on the Chinese stock exchange, which reopened this afternoon after a 10-day break.
In early trade, the benchmark ASX 200 share index was down about 120 points, or 1.7 per cent, as investors took their cues from a selling spree on Wall Street at the weekend.
It then bounced and recovered a little ground, ending the session 1.3 per cent lower.
On Wall Street overnight Friday, the Dow Jones Industrial Average fell 2.1 per cent in its heaviest fall for any session since August.
The falls come at a critical juncture: the Chinese stock market has opened this afternoon for the first time in more than week, setting the tone for the markets globally this week.
In the 10 days since Shanghai’s stock exchange has been open, the coronavirus outbreak has worsened significantly.
The Shanghai market had been due to reopen from the Luna New Year holiday period late last week, but the opening was delayed due to the spread of the virus.
In the minutes after it opened at 9.30am — 12.30pm Melbourne time — China’s key CSI 300 index tumbled 9.1 per cent.
It then regained some ground but was still down 7.5 per cent shortly before 5pm, Melbourne time. The Chinese market closes at 6pm, Melbournet time.
On the Australian bourse, energy stocks were hit particularly hard today after further falls in oil prices at the weekend.
Brent crude fell US13c overnight Friday to settle at $US58.16 a barrel — down about 4 per cent over the past week.
West Texas Intermediate fell US58c to end the session at $US51.56 a barrel, registering a fall of 4.8 per cent across the week.
During the session, prices sank to as low as $US50.97 a barrel — their lowest since early August.
On the Aussie bourse, shares in oil and gas producer Santos fell 5.1 per cent at $8.25, while Australia’s biggest independent oil and gas producer, Woodside Petroleum, was down 3 per cent. Origin Energy shares were down 3.5 per cent.
Other heavy fallers included wealth management heavyweight AMP, down 4.1 per cent, mining titan BHP, down 2.9 per cent, and investment bank Macquarie Group, off 2 per cent.
Among Australia’s top 200 listed companies, shares in more than 170 fell in early trade, while the five best-performing stocks were all “safe haven” gold producers.
In China, officials moved to inject a dose of confidence into the market ahead of the reopening of the bourse.
China’s central bank announced it would inject 1.2 trillion yuan ($260 billion) worth of liquidity into the markets through so-called reverse repo operations.
Under that program, the central bank buys assets with a promise to sell them later as a way of injecting short-term cash into the financial system.
The People’s Bank of China made the announcement in a statement published on its website yesterday, adding that the total liquidity in the banking system would be 900 billion yuan greater than at the same time last year.
China’s stock, currency and bond markets had all been closed since January 23.
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The fall in Australian share prices today follows a lacklustre week for the Aussie market — but that came after a robust run for the bourse.
In the first three weeks of January, the ASX 200 rallied to an all-time high above 7100 points. It has since fallen 2.9 per cent.
with AAP, Reuters