Australian sharemarket tumbles on northern hemisphere COVID, US election worries
The ASX followed overseas markets lower amid worries about COVID-19 cases surging in the northern hemisphere and a contested US election.
The Australian sharemarket tumbled after global markets fell overnight as coronavirus cases in the northern hemisphere continue to rise, adding to investor jitters over the prospect of a contested, drawn-out US presidential election.
The benchmark S&P/ASX 200 index sunk below the 6000 point mark to a three-and-a-half week low, closing 1.7 per cent lower at 5960, while the All Ordinaries Index slumped 1.5 per cent to 6168.
CommSec analyst Steve Daghlian said Wall Street had its worst trading day since June, shedding about 3.5 per cent, while European markets shed about 3 per cent.
The northern hemisphere COVID cases surge is putting US hospitals under strain, France is imposing a new nationwide lockdown this Friday and Germany is shutting bars and restaurants.
“Last Tuesday we were trading at the best levels since the start of the crisis,” ThinkMarkets Australia analyst Carl Capolingua said.
“We had strung together seven winning days in a row. The federal budget was out, it was good for the local economy, and all was great in the world.
“But over the last few days it’s like we’ve all just remembered at once that it’s not.”
Travel stocks fared poorly, with Corporate Travel Management shedding 5.43 per cent to $15.15, Qantas dropping 1.8 per cent at $4.35, Flight Centre losing 2.34 per cent to $11.67 and Sydney Airport backtracking 2.93 per cent to $5.64.
ANZ posted a 42 per cent full-year cash profit plunge after increasing its provisions against loans going bad as borrowers struggle to recover from the economic fallout of the global health crisis.
S&P Global Ratings said the provisions positioned the bank well to absorb the credit losses the health crisis would likely inflict.
ANZ slid 2.4 per cent to $18.70, Commonwealth Bank gave up 0.45 per cent to $68.14, National Australia Bank slipped 1.48 per cent to $18.60 and Westpac retreated 1.97 per cent to $17.95.
Mosaic Brands, the retail group that owns Noni B, Katies, Millers, Rivers, Rockmans and Crossroads, is closing up to 250 stores by mid-2021, blaming shopping centre landlords for not providing enough rent relief as it struggles with the impact of COVID-19.
The company said in August it could close up to 500 of its 1300-plus store portfolio nationally over the next year or two and since then has shuttered 73 stores.
Mosaic shares were unchanged at 63 cents.
Myer chairman Garry Hounsell stepped down after a revolt by the ailing department store chain’s two biggest shareholders. But the top investor, Solomon Lew’s Premier Investments, has again called for the entire board to step down.
Myer shares dropped 2.08 per cent to 23.5 cents.
JB Hi-Fi gave up 6.18 per cent to $47.38 despite delivering another strong quarterly update.
Trading in shares of online job ads company Seek were paused, pending an announcement, after activist investment firm and short seller Blue Orca Capital accused its Chinese platform Zhaopin of being “inundated with fake postings”.
Rio Tinto slipped 1.07 per cent to $90.96 and BHP retreated 2.19 per cent to $34.01 but Fortescue lifted 0.85 per cent to $16.62 after reporting record September quarter iron ore shipments.
The Aussie dollar was fetching 70.67 US cents, 54.26 British pence and 60.11 Euro cents in afternoon trade.
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