Share market falls as restrictions stifle economic recovery

Retail and travel stocks fell on Wednesday as the Victorian lockdown continues to threaten Australia’s economic recovery.

Australian stocks plunged on Wednesday as the fresh Victorian lockdown prompted falls in retail, travel and property stocks.

The benchmark S&P/ASX 200 fell 93 points, or 1.54 per cent to 5920.3, with consumer discretionary and industrials facing negative swings of more than 2 per cent.

The broader All Ordinaries index also suffered from the fresh spike in COVID-19 cases, plunging by 92 points, or 1.51 per cent to 6034.3.

The Australian dollar ended the session down 0.15 per cent to US69.35 cents.

Northern Star Resources experienced the largest daily gain of 6.5 per cent to 14.84 per share, while online real estate classifieds Domain suffered a 9.8 per cent drop to 3.14 per share.

Westpac chief economist Bill Evans said the Victorian lockdowns would alter Australia’s recovery post COVID-19, prompting the country’s second largest bank to revise its forecast annual economic contraction from 4 per cent to 4.2 per cent.

Australia’s four major banks all suffered falls after an announcement by the Australian Prudential Regulation Authority that loan repayment deferrals issued through COVID-19 hardship measures were to be extended until the end of March 2021.

APRA’s decision prompted Moody’s investment ratings to issue concern the default risk within banks would rise.

“APRA’s extension of its relaxed capital treatment for loans with coronavirus-related repayment deferrals provides banks with greater flexibility to manage potential losses and continue supporting customers,” Moody’s vice president Daniel Yu said.

“At the same time, the action highlights the large number of borrowers that have been impacted by the current economic disruption, significantly raising risk for Australian banks’ asset quality.”

Commonwealth Bank shares fell 0.95 per cent to $70.56, while Westpac incurred a 1.76 per cent to decline to $17.84 per share.

ANZ suffered a 2.13 per cent fall closing the trading at $18.41 per share, while NAB stock dropped by 1.96 per cent to $17.98 each.

Commercial property stocks experienced notable declines as large exposure to the Melbourne commercial property market prompted concern.

Shares in Vicinity Centres, which is the co-owner of Melbourne’s Chadstone shopping mall, dropped 3.7 per cent to $1.32 each, while Westfield’s owner Scentre Group fell by 1.4 per cent to $2.12 per share.

Lendlease suffered a 3.6 per cent fall to close the day at $11.71 per share, while GPT fell by 4.13 per cent to $4.18.

Wesfarmers posted a 1.9 per cent decline to $45.45 per share, while supermarket retailers booked a positive end to the session.

Woolworths posted a 1 per cent increase to $38.22 per share, while Coles Group shares rose 2.4 per cent to $17.79 each.

Refreshed travel restrictions caused Qantas shares to fall 1.37 per cent to $3.61, while stock in Telstra rose 0.59 per cent to $3.42 each.

BHP ended the session down 0.97 per cent to 35.75 per share, while Rio Tinto fell 0.78 per cent to $95.54 per share.