ASX has nasty start to the December quarter

AUSTRALIAN investors had a rough start to the December quarter with $47bn wiped from the market’s value in one day.

But travel stocks got a boost from Prime Minister Scott Morrison announcing the international border will reopen next month.

The benchmark ASX200 index slumped 2 per cent to close at 7185.5 points while the All Ordinaries Index plummeted 1.88 per cent to 7486.6.

“Not a great way to kick off the new month and quarter,” CommSec analyst Steven Daghlian said.

The down trend began about mid-August after the ASX hit a record high, he noted.

The ASX 200 closed at 7629 points on August 13 and has plunged 5.8 per cent since then.

Mr Daghlian said fund managers could use a new quarter to “tidy up their investment portfolios in what’s called ‘window dressing’, causing markets to rise or fall substantially”.

Wall Street taking a hit overnight on Thursday didn’t help, he said.

“We’ve got all the same issues that we’ll be dealing with in coming weeks and months ... an energy crisis in China, big drops in iron ore prices and concerns of rising interest rates in the United States.”

In the US, the Dow Jones Industrial Average fell 1.6 per cent overnight on Thursday.

OMG chief executive Ivan Tchourilov said it had been a choppy week. “US congress voting to avoid a shutdown until December did little to help market sentiment, as the debate rages on between fiscal conservatives and liberals,” he said.

The banks took a walloping, with Commonwealth Bank slumping 4.07 per cent to $100.08, ANZ shedding 2.52 per cent to $27.44, National Australia Bank backtracking 2 per cent to $27.27 and Westpac falling 2.27 per cent to $25.41.

In the travel sector, Qantas firmed 0.7 per cent to $5.71, Webjet added 2.05 per cent to $6.47 and Flight Centre gained 1.82 per cent to $21.85 after the Prime Minister revealed how the border reopening would work, with fully-vaccinated Australians, permanent residents and their family members undergoing seven-day home quarantine in states and territories able to implement the system.

“Travel stocks have been increasing in valuation since August and show no signs of slowing,” Mr Tchourilov said.

“The resumption of international travel will only do more to increase valuations for shareholders.”

Regional Express rose 6 per cent to $1.59, a day after the airline said in its annual report that surviving the next six months required being “incredibly agile and nimble, ready to change course completely at the drop of a hat”.