Shares caught in viral sell-off
AUSTRALIA’S benchmark share index has fallen below 7000 amid a broad-based sell-off triggered by concerns about the coronavirus.
And the Australian dollar and oil prices are continuing to wane while gold stocks are forging higher as wary investors turn defensive.
Less than two weeks after closing above 7000 points for the first time, the ASX 200 yesterday fell below the mark in its worst session this year.
More than $25 billion was cut from the value of the nation’s listed companies as the benchmark index dropped 1.4 per cent, sliding almost 100 points to 6994.5.
It was the steepest singlesession drop for the ASX 200 since New Year’s Eve, when it retreated 1.8 per cent on light trading volumes.
The slide yesterday followed widespread selling in European and US markets the previous night as health authorities globally flagged a steady increase in the number of people infected with coronavirus.
In a research report for investors, a team of ANZ analysts led by the bank’s head of Australian economics, David Plant, said the outbreak was having “a growing impact on market sentiment”.
The Aussie dollar, which had rallied last month and peaked above US70C at the start of this month, was again caught yesterday after falling steeply on Monday. It has now fallen more than 3.5 per cent since January 1.
Benchmark oil prices also lost more ground yesterday, continuing a slide that started earlier this month, to touch fresh three-month lows.
On the stockmarket, travel companies, oil producers and mining heavyweights BHP and Rio Tinto were among those scorched.
Qantas Airways shares tumbled 5.2 per cent – their biggest single-session sell-off in more than two years.
It came as analysts at investment bank UBS cut their earnings forecast for Qantas, forecasting international air traffic would slide 3 per cent, but adding “further downside could be possible if the coronavirus spreads”.
BHP shares fell 3.3 per cent, wiping almost $6.5 billion from the group’s market value, in the heaviest fall for that stock since August, while Rio fell 3.1 per cent.
Gold miners including Newcrest Mining and Northern Star Resources, however, gained as investors took cover. The spotlight today swings to Hong Kong’s stock exchange as it reopens.