‘Things are not looking great’: ASX plunges after three days of gains
Australia’s bear market is far from over, with the ASX plunging again and every sector finishing lower following three days of gains.
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Australia’s share market has plunged again following three days of gains, smashing any incipient hopes that the bear market is finished.
The S&P/ASX200 benchmark index gained two per cent in early trade but then faded throughout the day to finish Friday down 270.9 points, or 5.3 points, to 4,824.4.
The broader All Ordinaries index closed 261 points, or 5.08 per cent, at 4,874.2.
“It’s quite a tumble,” said CommSec market analyst Steven Daghlian.
For the week the market finished just 25.7 points up, or 0.5 per cent, with three days of gains totalling 567.2 points sandwiched by two days of losses on Monday and Friday.
“We’re just hanging on to the gains,” Mr Daghlian said.
“I think there’s a bit of cautiousness heading into the weekend, with how COVID-19 infections could unfold and government reactions.”
The US House of Representatives still has to vote on a $US2.2 trillion ($A3.6 trillion) stimulus measure, while 3.3 million people have filed for unemployment benefits - six times the United States’ previous record.
“Things are not looking great,” Mr Dahglian said.
Every sector was lower on Friday with real estate the worst hit, falling 8.7 per cent as and Mirvac fell 10.1 per cent and Goodman Group dropped 10.7 per cent. Scentre Group dropped 12.5 per cent as it and Premier Investments exchanged words over whether proper protocols were followed after two of Premier’s workers were allegedly exposed to coronavirus-positive customers at one of Scentre’s Brisbane malls a fortnight ago.
In the financial space, the big banks fell between six and seven per cent. Commonwealth dropped 6.7 per cent to $57.66, NAB fell 6.3 per cent to $15.12, ANZ dropped 7.4 per cent to $15.47 and Westpac fell 7.1 per cent to $14.89. The mining sector dropped 4.9 per cent as BHP fell 5.4 per cent to $29.03, Rio Tinto dipped 2.7 per cent to $85.78 and Fortescue Metals dropped 8.8 per cent to $9.60.
Goldminers were not immune to the sell-off, with Newcrest down 4.9 per cent, Evolution dropping 7.2 per cent and Northern Star down 7.5 per cent. Wesfarmers fell 7.3 per cent to $32.25 and Woolworths dropped 5.3 per cent to $34.80 after saying it was creating 20,000 new jobs to meet a surge in demand. Woodside Petroleum sagged 6.4 per cent to $16.84 after saying it would cut spending by 50 per cent and defer final investment decisions on a number of key projects.
Homewares trader Adairs and Kathmandu joined the ranks of retailers temporarily closing doors.
Adairs was down 8.9 per cent at 72 cents and Kathmandu gained 13.0 per cent to 95.5 cents.
The Australian dollar was buying over 61 US cents for the first time in eight days, trading at 61.06 US cents, up from 59.14 US cents as the market closed on Thursday.
WALL STREET’S BOOST AMID STIMULUS
Wall Street stocks opened higher following Senate passage of a massive stimulus bill as the government reported an unprecedented record in US jobless claims.
About 25 minutes into trading, the Dow Jones Industrial Average was at 21,763.45, up 2.7 per cent.
The broadbased S&P 500 also gained 2.7 per cent to 2541.75, while the tech-rich Nasdaq Composite Index advanced 2.2 per cent to 7549.78.
The Department of Labor said there have been 3.3 million weekly jobless claims, four times the previous record set in 1982.
Investors were relieved that a massive surge in unemployment applications, despite busting records at 3.3 million, fell short of the worst forecasts.
Treasury Secretary Steve Mnuchin said the jobless number was “not relevant” as he argued the rescue package being voted on in Congress will help alleviate joblessness.
“I just think these numbers right now are not relevant,” Mr Mnuchin told CNBC.
“Obviously there are people who have jobless claims and, again, the good thing about this bill is the president is protecting these people, so you know, now with these plans, small businesses will hopefully be able to hire back a lot of these people,” he argued.
He also pointed out there are job opportunities out there.
“By the way, you know, lots of big, big companies do continue to hire for obviously grocery stores, pharmacies, you know, delivery services. These companies are on overtime, so I know they are hiring people as fast as they can,” he said.
The Senate late on Wednesday unanimously approved a biggest-ever $US2 trillion ($A3.7 trillion) rescue package that provides funding to the overstressed health care system, boosts unemployment payments and sets aside lending to small businesses that have been crippled by government-imposed shutdowns to control the spread of the coronavirus.
Passage in the Senate came after days of acrimonious debate and haggling.
The bill now goes to the House, where the legislation’s pace of advance will depend on whether last-minute objections delay passage.
The measure is needed to respond to the mounting economic hit from the coronavirus.
Speaker Nancy Pelosi said she was “certain” the House would pass the Senate’s coronavirus relief bill with strong support from both parties.
“We have the legislation that will come to the floor tomorrow. I anticipate, I feel certain we will have a strong bipartisan vote. We take some pride in the fact,” the California Democrat said at the Capitol during her weekly press briefing.