ASX faces rollercoaster trading day as investors await US COVID-19 updates
Australian shares have surged at the start of a new week despite a weak lead from virus-rattled overseas markets. This comes as experts reveal how the daily COVID-19 headlines are affecting share prices around the world.
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Australian shares have surged at the start of a new week despite a weak lead from virus-rattled overseas markets.
The S&P/ASX200 benchmark index was up 82.5 points, or 1.63 per cent, to 5,150.0 at 10.15 AEDT on Monday in a fresh show of coronavirus volatility.
The All Ordinaries index was also up, rising 82.8 points, or 1.62 per cent, to 5,189.7 points after the first 15 minutes of trading.
All sectors except for utilities began the week strongly.
Energy, tech, property, consumer discretionaries and healthcare shares each climbed more than 2.0 per cent at the open while the financials gained a collective 1.53 per cent.
The S&P/ASX200 benchmark index finished Friday down 86.8 points, or 1.68 per cent, having also been tipped to rise in early trade.
Wall Street’s main indices fell more than 1.5 per cent on Friday after US employment showed a worse-than-expected drop in jobs amid the COVID-19 pandemic. Oil prices rose after US President Donald Trump’s on Saturday said he would put tariffs on Saudi and Russian production, potentially accelerating a meeting between the two.
One Australian dollar was buying 59.99 US cents at 1015 AEDT on Monday, down from 60.63 US cents at the close of market on Friday.
CommSec chief economist Craig James said the US market, and the expected raft of news about COVID-19 on Monday, would continue influence Australian shares. IG Markets analyst Kyle Rodda said the key remains the trajectory of new coronavirus cases.
“Just as is the case for everyone currently, market participants’ decision- making centres on what success health authorities – especially those in Europe and the US – are having in “flattening the curve” of new COVID-19 cases,” Mr Rodda said.
“Globally, the curve continues to rise, as the number of infections of the disease approached 1.2 million over the weekend. The United States has arguably become the epicentre for the virus now. It’s caseload has jumped beyond 300,000, with new cases in the US still increasing exponentially.”
Despite recording back-to-back sessions in the red, the local bourse still rose 4.6 per cent over the five sessions for its best weekly gain since December 2011.
One Australian dollar was buying 59.98 US cents at 0800 AEDT on Monday, down from 60.63 US cents at the close of market on Friday.
“The lower Australian dollar is good news for our exporters,” Mr James said.
Meanwhile, gold was up $8 per ounce, which Mr James said should be a positive for gold shares.
Iron ore was down 85 cents per tonne, or one per cent.
Mr James said while the world was still focused on coronavirus and waiting for a vaccine, there had been some encouraging news, with more companies getting on board and more testing.
“It’s all about how long this is going to take for stabilisation … how quickly the curve can flatten,” he said.
The Reserve Bank of Australia will meet on Tuesday and Mr James said there could be an announcement of new measures.
But he said it was likely the cash rate would remain at 0.25 per cent. “We’ll just have to wait and see,” he said.