Plunging oil prices take toll on ASX

Plunging crude oil futures prompted the ASX’s worst one-day drop in three weeks.

Falling oil futures set the scene for another day of losses on the ASX. Picture: AP

Plunging crude oil futures prompted the ASX’s worst one-day drop in three weeks, wiping out all of the previous week’s gains.

Losses accelerated at the close even as coronavirus cases approached a plateau at home and abroad.

The benchmark ASX200 slipped to daily lows of 5353 at the final match, a decline of 135 points or 2.45 per cent for the session.

Meanwhile, the All Ords lost 130 points or 2.34 per cent to 5414.7.

Weakness in the energy sector was the key driver of the decline – finishing down 4.6 per cent and exacerbated by a 7.8 per cent drop in Caltex after suitor Couche-Tard shelved its $8.8bn takeover plans.

The rapid decline in the ASX coincided with a crash in US crude to its lowest level in over two decades.

“Energy sector was on a wide spread sell down after oil dipped below $US15/bbl for the first time since 1999,” RBC head of equities Karen Jorritsma noted.

“Oil names were looking sickly here today, and no surprise when the production costs for majority of producers globally is between $US25/bbl and $US95/bbl, so at current levels the entire industry is out of the money.”

Woodside led the march lower, shedding 4.4 per cent to $20.15 while Oil Search lost 2.9 per cent to $2.66 and Santos lost 3.7 per cent to $4.13.

Caltex finished the session down 7.8 per cent to $21.72 – well off the Couche-Tard’s final bid of $35.25 apiece lobbed earlier this year.

Signs that the outbreak of coronavirus could be easing did little to stem the decline, even as only 26 new cases were reported in the past day.

At the local close, The Australian dollar was buying US63.84c, down 0.25 per cent from the New York close.

Across the rest of the market, eyes were on Virgin amid speculation a buyout could be on the table, and as Queensland told New South Wales to “back off” in its bid to lure the airline's HQ to the southern state.

Shares in the airline remained halted at 8.6c while rival Qantas slipped by 3.5 per cent to $3.59.

Travel names took a new hit. Flight Centre slipped by 4.6 per cent to $10.04, Webjet lost 4.2 per cent to $2.49 and Corporate Travel lost 1.7 per cent to $9.33.

Sydney Airport said traffic had plunged by 97pc so far in April, as it outlined its capital management plans including the cancellation of its interim dividend. Shares in the airport finished down 2.9 per cent to $6.10 – still off recent lows of $4.37.

NAB was the worst of the big four for much of the day after it said first-half profit would be hit by writedowns of more than $1.1bn, the rest of the majors caught up by the close.

NAB settled to a loss of 2.4 per cent at $16 while Commonwealth Bank fell by 1.9 per cent to $59.88, Westpac gave up 2.2 per cent to $15.52 and ANZ dialled back by 2.5 per cent to $16.15.

Across the major miners, BHP was sold off by 1.5 per cent to $30.82 as Rio Tinto gave up 2.8 per cent to $88.92 but Fortescue managed to tick higher by 0.6 per cent to $11.35.