Australia Stocks fall on global growth concerns

The Australian share market tumbled on Wednesday, 26 February 2020, as investors fled riskier assets on inheriting weak leads from U.S. and European shares overnight amid intense fears about a slowdown in global growth caused by the deadly coronavirus.. Around late afternoon, the benchmark S&P/ASX200 index declined 174.10 points, or 2.54%, to 6,692.50, while the broader All Ordinaries stumbled 177.71 points, or 2.56%, to 6,776.10.

Sydney market opened lower and worsened amid intense fears about a slowdown in global growth caused by the deadly coronavirus. The spreading deadly virus, that has infected more than 80,000 and killed more than 2,700 - including 40 outside mainland China, where it originated, has sent shock waves through the markets. There has been a recent spike in coronavirus cases outside of China, where the disease was first reported. South Korean authorities have confirmed more than 900 cases within the country's borders. Meanwhile, Italy has been the worst affected country outside of Asia, with more than 200 reported cases. Iran also confirmed at least 12 deaths.

 

The World Health Organization says the epidemic has peaked in China, but concern that its spread is accelerating in other countries is likely to keep investors on edge.

Adding to recent fears was an alert from the US Centers for Disease Control and Prevention on Tuesday warning Americans to prepare for the spread of coronavirus in the United States, signalling a change in tone for the Atlanta-based US health agency. This follows news on Monday about a spike in cases in other countries in Asia, the Middle East and Europe, outside the virus's epicenter in China. Investors are closely watching reports in Italy, Iran and South Korea.

Some investors had been betting that central banks like the U.S. Federal Reserve would counter any economic weakness resulting from the virus with support such as interest rate cuts. But worries about supply chain disruption curbed this confidence.

Falls have been across all sectors and rather indiscriminate. The IT sector is experiencing the largest percentage decline, down more than 3%.

Supermarket giant, Woolworths is 3% softer after reporting a 7.7% decline in its first half net profit after tax to $887 million. The decline was mostly due to one-off costs from the restructuring of its hotel and drinks business, Endeavour Group and remediation for staff underpayments, which has increased to $315 million.

Healius (HLS) rose around 17% after more than tripling net profit to A$66.3 million. The medical and pathology centre operator also lifted the bottom end of its FY20 guidance range and is considering a sale of its medical centre division.

Virgin Australia (VAH) was 6% higher despite the airline facing a hit of A$50-$70 million to 2H earnings from the coronavirus impact.

CURRENCY & COMMODITY NEWS: The Australian dollar slid against greenback, amid deepening concerns about the coronavirus outbreak and its effects on the global economy. The Australian dollar was at $0.6593 after seeing levels around $0.662 yesterday.

Crude oil prices recovered some recent losses in Asian trading hours, with international benchmark Brent crude futures up 0.71% to $55.34 per barrel. The U.S. crude futures contract also gained 0.84% to $50.32 per barrel. US oil futures settled nearly 3% lower at $49.90 a barrel and the global oil benchmark dropped 2.4% to $54.95 a barrel on Tuesday, on expectation of lower demand for energy in a coronavirus-inspired economic downturn.

Powered by Capital Market - Live News