Viewing Gallery At The Australian Securities Exchange
Viewing Gallery At The Australian Securities Exchange

Market loses $40 billion in 15 minutes

The Australian share market has plunged at the opening of trade after the rising death toll from the coronavirus over the weekend dawned on investors and economic fears set in.

The local benchmark S&P/ASX200 index was down 94.6 points, or 1.35 per cent, at 6922.6 at 1030.

The market had lost nearly $40 billion in the first 15 minutes of trade, with the energy sector the hardest hit, down 3.5 per cent when the gauge was taken after 30 minutes of trading.

 

The death toll from the coronavirus epidemic rose to 304 on Sunday as countries began to tighten the movement of travellers who had visited the epicentre of the outbreak in China's Hubei province.

Prime Minister Scott Morrison followed Washington's decision over the weekend to bar most foreigners entering from China. Japan and Singapore announced similar measures.

This escalation of the spread of the deadly virus has led to investors pulling back and retreating to safe haven industries and shares such as gold miners, Bell Direct market analyst Jessica Amir said.

"There's a lot of uncertainty with the coronavirus with the death toll rising but we do have to bear in mind that more people have died of the common cold," she told news.com.au.

"So this is really panic selling."

Investors are cautious the crippling lockdown will have material impacts on the supply chain of trade and stunt the world's second largest economy.

This development combined with negative expectations for the region - mainly Goldman Sachs predicting China's GDP to fall - has compounded growth sentiment.

Oil prices are lower again on mounting worries about the economic damage to flow from the fast-spreading virus. Australian Gas and oil producer Oil Search's shares were down more than 7.5 per cent at $6.69 at 10.30.

Big miners were also down, with Fortescue Metals Group losing 36 cents, or 3.16 per cent, to $11.03.

Travel shares were pummelled again. Qantas lost 14 cents, or 2.18 per cent, to $6.72 and Flight Centre was down 97 cents, or 2.47 per cent, at $38.34.

Gold miners surged as demand for the precious metal keeps rising based on investors retreating for safe haven assets.

Newcrest was up 41.5 cents, or 1.41 per cent, at $29.94.

The Australian dollar was buying 66.93 US cents, down from 67.19 US as the market closed on Friday.

ASIAN SHARES SET FOR GLOOMY DAY

Data out of the United States and Europe on Friday pointed to economic weakness while a mixed batch of corporate earnings added to the gloom.

Today's decline in Asian equities follows a steep sell-off in global share markets, which, on Friday, posted their biggest weekly and monthly declines amid growing concerns about the economic impact of the coronavirus outbreak in China.

On Friday, the Dow fell 2.1 per cent, the S&P 500 declined 1.8 per cent and the Nasdaq Composite dropped 1.6 per cent.

- with AAP and Reuters


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