ASX swings wildly before flat finish

After another wild day that included a stunning 3 per cent reversal, the ASX gyrated back for a tame flat finish.

Ongoing turmoil in global oil markets got the ASX off to a negative start: Picture: Bloomberg

The market staged a stunning 3 per cent reversal in Wednesday’s trade but fell flat in the final match under the weight of commodity names.

Continued weakness in oil markets prompted an early 2.3 per cent slide to lows of 5100.7, as jitters spilt into the broader financial markets. But the bourse rallied throughout the afternoon session and was up as much as 0.6 per cent just before the close.

But the gains were lost in the final match and the ASX 200 finished down 0.1 point at 5221.2. The All Ords lost 2.5 points or 0.05 per cent to 5276.1.

The oil rout has led to a broader rethink on risk, prompting losses of more than 3 per cent on Wall Street overnight, while regional markets were mixed.

Japan’s Nikkei closed down 0.7 per cent, the Hang Seng edged up 0.2 per cent and China’s Shanghai Composite was up 0.4 per cent.

Australian 10-year Treasury yields were lower after an increase in demand while the Aussie dollar was buoyed by strong retail sales at US63.18c.

Preliminary retail sales data for March delivered sorely needed good news for the local stockmarket, recording a surge of 8.2 per cent for its biggest lift on record as shoppers stocked up in the initial stages of the coronavirus panic.

ANZ cautioned that the data would soon show a very different picture: “April ANZ-observed spending suggests that the lockdown preparation period for households is over and the effects of reduced incomes, lost jobs and other financial constraints are becoming the main factors in spending decisions,” economist Adelaide Timbrell noted, saying she expected the decline to deepen.

“The end of lockdown will trigger a spike in demand, but we expect a weak trend for some time, reflecting lingering effects of lockdown on incomes.”

Energy names bore the brunt of equities selling. Woodside fell 1.5 per cent to $19.60, Oil Search lost 3.6 per cent to $2.41 and Beach Energy fell 3.9 per cent to $1.24 despite the producer maintaining guidance for the full year.

BHP was also drag, falling by 3.6 per cent to $28.97, while rival Rio Tinto shares slid 2.2 per cent to $85.14 and Fortescue fell 1.4 per cent to $10.95.

Meanhile Ramsay Health Care was the latest to tap the market, launching a $1.4bn equity raising as its revenue takes a hit from coronavirus restrictions. Its shares last traded at $64.29.

Kathmandu closed its retail entitlement offer to raise $50m and the retail chain was sold off by 4 per cent to 73c.

Across the rest of the retail sector, some got a boost from the positive retail sales data — JB Hi-Fi jumped 3.8 per cent to $33.34, Premier Investments was up 0.8 per cent to $12.90

and Domino’s edged up by 0.3 per cent to $50.81.

Myer extended its store closures to May 11 but still its shares rose 5.6 per cent to 19c.

Coles added 1.1 per cent to $16.18, Woolworths rose 0.8 per cent to $36.29 while Metcash gave up 3.4 per cent to $2.54.

A2 Milk rose 1.7 per cent to $18.62 on reports that panic buying in the March quarter had lifted revenue.

Banks were a key driver of the intraday reversal — Commonwealth finished up 1.1 per cent to $59.26 amid reports the bank is owed in the order or $20m to $30m by the now-collapsed Virgin Australia.

Westpac gained 1.1 per cent to $15.34, ANZ put on 1.4 per cent to $16.02 and NAB outperformed with a lift of 1.7 per cent to $15.90.

AMP closed out the session down 4 per cent to $1.31 as it faced a new strike call from influential proxy house ISS.