ASX value sinks 21pc in March as coronavirus sparks wild volatility

A rocky session for Australian shares on Tuesday cemented the market’s worst month since October 1987.

Shares got off to a strong start, but gains evaporated to close lower by 104 points, or 2.02 per cent, to 5076.8.

A rocky session for Australian shares has cemented the market’s worst month since October 1987, down 21 per cent amid coronavirus panic and fear of a widescale global recession.

In another seesawing session, that has become the new normal for the benchmark S&P/ASX 200, shares got off to a strong start, soaring as much as 3.6 per cent to two-week highs of 5366.4 but those gains evaporated at lunch. By the close, the market was lower by 104 points, or 2.02 per cent, to 5076.8, giving up some of Monday’s record 7 per cent rally.

Meanwhile, the All Ords followed a similar trajectory to close down 84 points, or 1.61 per cent, to 5110.6.

This month’s share slide is second to October 1987, when stocks dropped by 42 per cent, spurred by fears of extended economic instability. Similarly, this week’s read of consumer confidence slumped by 9.6 per cent to its worst on record.

In a devastating quarter for long-only funds, the S&P/ASX 200 lost 24 per cent in the March quarter.

It was the worst quarter since inception of the index in 2000. The long-standing All Ordinaries index lost 24.9 per cent, its worst quarter since the 1987 Crash and its third-worst since at least 1970.

The Australian dollar was 0.2 per cent stronger on Tuesday afternoon against the US dollar, buying US61.85c.

The wave of companies withdrawing guidance slowed somewhat in Tuesday’s session, but the pace of capital raisings moved up a gear.

Kathmandu halted trade in its shares at 98c, believed to be in relation to a capital raise, while Webjet reportedly was making progress on its own lifeline - rumoured to be supported by private equity outfit Bain Capital. Its shares last traded at $3.76.

By far the most high profile was Virgin Australia though, the airline confirming it was in talks with the government for a $1.4bn bailout package - that sent shares soaring by 19 per cent to 9.5c. But rival Qantas was quick to chime in - saying it would expect $4.2bn as an equivalent bailout. Its shares finished the session up 0.9 per cent to $3.23.

Across the rest of the beleaguered travel sector - Flight Centre remained halted amid crisis talks - its shares last traded at $9.91 while Corporate Travel Group finished higher by 5.3 per cent to $8.72.

In a survey of customer spending data, ANZ said panic buying had peaked with purchases now extending to electronics and recreation goods.

That added pressure to Coles after Wesfarmers announced it was trimming its stake in the grocery chain - pulling it down 9.9 per cent to $15.16 at the local close.

Meanwhile, Wesfarmers lost 4.5 per cent to $34.27 and Woolworths gave up 7.9 per cent to $35.10.

Bell Potter’s Richard Coppleson noted that “huge portfolio switching” was a key driver of a lift in some of the market’s beaten up stocks from some of the more blue chip names.

“We saw some selling of the market’s strongest stocks and buying of some of those that have been hammered that will be supported via the government’s jobs protection package,” he said.

That rationale rings true for some of the biggest movers - Credit Corp added 26 per cent to $13.69, Vicinity Centres lifted by 6.2 per cent to $1.04 and Scentre gained 6.1 per cent to $1.56.

Meanwhile, CSL slipped by 5.1 per cent to $296.68, as Cochlear continued its run higher with a gain of 2.5 per cent to $187.45.

In the heavyweight miners BHP gave up 4 per cent to $28.98, Rio Tinto fell by 3.4 per cent to $84.57 and Fortescue lost 1 per cent to $10.

To banks, and Commonwealth lost 3.3 per cent to $61.82, Westpac edged up by 2.1 per cent to $16.50, ANZ put on 1.1 per cent to $16.96 and NAB rose by 2.3 per cent to $16.68.

Nine Entertainment jumped by 9.1 per cent to $1.14 as it unveiled a range of cost cutting measures, while Seven West Media put on 6.8 per cent to 7.8c.