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Australia ASX200 falls on fresh COVID-19 concerns

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Capital Market
The Australian share market finished session lower on Tuesday, 22 December 2020, as investor sentiment was dampened by business restrictions and flight bans in Europe and other countries as a result of the rampant spread of a new strain of COVID-19 in Britain that could impact the recovery of the global economy.

At closing bell, the benchmark S&P/ASX200 declined 70.31 points, or 1.05%, to 6,599.57. The broader All Ordinaries dropped 74.57 points, or 1.08%, to 6,845.47.

The market grappled by risk-off environment after news that the E.U. was banning United Kingdom flights to Europe due to fears about a new strain of coronavirus, said to be up to 70% more transmissible than the original. A more-virulent strain of the coronavirus in Britain sparked fears of fresh disruptions and weighed on investors' expectations of a vaccine-led economic rebound.

 

Australia continued its efforts to contain a virus outbreak in its most populous state, New South Wales, which reported its lowest one-day rise in fresh cases in five days amid stringent lockdowns in the affected suburbs.

Energy stocks slumped, as oil prices sank on border closures in several countries to contain the new virus strain. Oil prices dropped on expectations of lower demand, with U.S. crude recently down 0.25% at $47.85 per barrel, while Brent was 2.79% lower at $50.80. Woodside Petroleum and Santos lost 3.1% and 3.3%, respectively.

Shares of materials and resources closed down. Industry giants BHP Group and Rio Tinto led losses among heavyweight miners, which slipped 2.3%.

ECONOMIC NEWS: Australia Retail Sales Spike 7.0% On Month In November-Australia total value of retail sales spiked a seasonally adjusted 7.0% on month in November, the Australian Bureau of Statistics said on Tuesday, coming in at A$31.623 billion, following the 1.4% increase in October. By industry, Household goods led the rises (13%), impacted by a full month of trade in Victorian stores, a successful Black Friday sales period, and new product releases in the Electrical and electronic goods subgroup. Monthly rises were also significant in Clothing, footwear and personal accessory retailing, Department stores, Other retailing, and Cafes, restaurants and takeaway food services. On a yearly basis, retail sales jumped 13.2%.

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First Published: Dec 22 2020 | 4:41 PM IST

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