Coronavirus spurs panic selling to wipe $210bn in value from the ASX for the week

In one of the worst weeks in history for Australian shares, global markets have moved into correction territory.

Just eight stocks edged higher out of the top 200 on Friday. Picture: AAP

Panic selling spurred by the threat of coronavirus has wiped $210bn in value from the local market over the past week, putting the benchmark S&P/ASX 200 firmly in correction territory.

At the close on Friday, shares on the ASX 200 were down 3.25 per cent, or 216 points, to 6441.2 to cement a 9.7 per cent loss for the week – the worst weekly loss since the global financial crisis of 2007-08 (GFC).

Further still, the battering represents a 10.5 per cent decline from last Thursday’s record high of 7197.2, while the 8 per cent monthly decline is the worst since August 2015.

It's the market’s fastest correction on record, just a day after the US fell into a correction also.

The ASX All Ordinaries closed 3.35 per cent lower, or 226 points, at 6511.5.

Risk aversion continues to drive the sell-off, as Hyundai shut its factories in Japan and all schools across the country were closed, while confirmed cases in South Korea now top 2000.

China’s Shanghai Composite was lower by 3 per cent at the local close, while Hong Kong shares traded down 2.7 per cent and Japan’s Nikkei was down by 4.6 per cent.

The Aussie dollar, often seen a proxy for China growth, has been hammered – shedding as much as 0.7 per cent to set new 11-year lows of US65.23c.

“The AUD’s joint pre-eminent status (alongside NZD) as the market’s preferred China and global growth proxy means that unless or until concerns about the growth implications of the COVID-19 outbreak dissipate, AUD/USD risks remain skewed firmly to the downside,” NAB’s head of FX Strategy Rodrigo Catril said.

“We see it struggling to get back above US70c this year and then only in the context of a materially softer USD, for which some combination of improved global growth prospects and still-lower US rates are necessary.”

That risk aversion pulled US yields to record lows of 1.24 per cent, while Australian 10-year yields were down 3.5 per cent to a record low of 0.826 per cent at the local close.

In equities, just eight stocks edged higher out of the top 200, with a negative tone overwhelmingly driving the market.

Energy stocks were some of the hardest hit, the sector down 3 per cent after oil prices dived to a 12-month low on concerns global growth will slow and demand wane amid the outbreak.

Australia’s largest listed oil and gas group, Woodside finished lower by 3.5 per cent to $27.92, Santos shed 2.6 per cent to $6.83 and Oil Search wound back by 3.4 per cent to $5.49.

Iron ore futures in China sank for a fifth day, the longest losing streak since September, pulling bulk miners lower.

BHP sank by 4.5 per cent to $33.60, Rio Tinto stepped back by 3.5 per cent to $87.27 and Fortescue lost 6.4 per cent to $10.08 even as founder and chairman Andrew Forrest lifted his stake in the miner by 6 per cent.

Even gold miners, which had been buoyed by safe-haven buying through the week, weren’t immune to Friday’s sell-off.

Newcrest dropped 8 per cent to $26.30, Evolution shed 9.6 per cent to $4.04, Northern Star wound back by 9.2 per cent to $13.46 but Gold Road Resources was the worst of the sector – down 14 per cent at the close to $1.45.

Commonwealth Bank led the financials lower, shedding 3.1 per cent to $81.78, while Westpac stepped back by 2.8 per cent to $23.64 and ANZ lost 2.7 per cent to $24.83 amid a fresh class action against both banks for their “junk insurance” policies. NAB gave back 3.1 per cent to $25.10.

NextDC was a rare ray of positivity in the market after handing down an earnings boost of 21 per cent for the half year. Shares in the group rose by 6.3 per cent to $7.89 and were the best performer on the market.