Sharemarket slips as global COVID-19 fears and political unrest rises
The Australian share market has tumbled as global coronavirus fears dent confidence and fuel a rise in economic and political uncertainty.
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Australian shares have tumbled at the beginning of the session, confirming predictions that surging coronavirus numbers and political instability overseas would dent market sentiment.
The ASX/S&P200 index fell 45 points or 0.8 per cent at the open to 5778, while the broader All Ordinaries index started Tuesday’s trading day 47 points or 0.8 per cent lower to 4966.5.
Financials, energy and material stocks have seen the largest falls at the start of the session.
The local stock market slip comes off the back of a wave of share sell-offs in the US financial markets that prompted Wall St to sink at the end of its local session.
The Dow Jones index fell 510 points or 1.8 per cent to 27,147.7, the S&P 500 dropped 38 points or 1.2 per cent to close at 3281 and the Nasdaq index shed 14 points or 0.1 per cent to 10,788.8.
Before the trading day, SX futures were pointing to a lower start.
Wall St’s sell-off has been fuelled by rising political tension and a damning report that revealed a swath of suspect banking transfers equating to more than $US2 trillion.
The banking transfers, which have embroiled several banks including Australian incumbents, are linked to transactions between 1999 and 2017 and are related to potential money laundering and criminal activity.
US stocks were also weighed down by growing political risks, which are affecting confidence and certainty in the major economy.
Congress is yet to agree on another COVID-19 stimulus package, and there is a growing concern of a US federal shutdown at the end of the month if stopgap funding cannot be agreed upon.
ANZ warned fresh fears of a second COVID-19 wave across Europe would likely see a return of large-scale shutdowns in many of the continent’s countries and would likely impact global economic confidence.
“COVID-19 infection rates in many major European economies are rising sharply and will require robust, if localised, restrictions, undermining growth expectations,” ANZ economist David Plank said.
At 10.06am, the Australian dollar was trading at 72.3 US cents, up 0.10 per cent.
Investment firm Shaw and Partners flagged the fall was likely to weigh heavily on commodity markets, with crude oil down almost 6 per cent and gold trading 2 per cent lower.
Originally published as Sharemarket slips as global COVID-19 fears and political unrest rises