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Sharemarket dented from growing virus fears

Fresh lockdown fears following a growing coronavirus cluster in Sydney’s northern beaches have weighed heavily on the performance of the local sharemarket, which has slumped after setting a new 100-day high on Thursday.

The benchmark S&P/ASX 200 index dropped 81.2 points, or 1.2 per cent lower, to 6675.5, with large falls felt across the travel, financial and commercial property sectors. Materials was the best performing sector of the day.

The broader All Ordinaries Index dropped 76 points, or 1.1 per cent, to 6924.1, while the Australian dollar at the end of the local session was fetching 75.89 US cents.

CommSec analyst Steven Daghlian said the Australian sharemarket was unable to follow the bump up in performance felt on Wall Street, which set new records based on stimulus prospects expected by the US government. The Dow Jones index added 0.5 per cent, the S&P 500 rose 0.6 per cent and the Nasdaq climbed 0.8 per cent higher.

“We have not taken on-board the improvements in the US markets which pushed US shares to the best levels on record,” he said.

“The winners today are certainly mining stocks, and this has everything to do with commodity prices. Oil, iron ore and gold all lifting again.”

Gains in the resources sectors assisted Whitehaven Coal to experience the biggest uplift during the challenged trading day. Its stocks rose 5.8 per cent to $1.65 per share at the close.

Stem-cell biotech Mesoblast had the largest share price drop of the day after a disappointing announcement that its remestemcel-L therapy to assist COVID-19 patients suffering respiratory problems would not meet its primary objectives. Mesoblast’s share price plummeted 36.1 per cent to $2.41 each.

The financial sector’s performance also waned on Friday, with QBE insurance suffering a 12.5 per cent drop to $8.71 per share following a profit update that flagged the major insurer was expecting to book a loss of $US1.5bn for the 2020 fiscal year.

Major banks also took a tumble. Commonwealth Bank ended the session down 1.8 per cent to $83.16 per share, while Westpac shares dipped 1.5 per cent to $19.90 each.

ANZ dropped 1.4 per cent to $23.40 per share at the close, and NAB shares closed 2 per cent lower at $23.37 each.

NAB chairman Philip Chronican said Sydney’s northern beaches outbreak – which has now recorded 28 confirmed COVID-19 cases – highlighted how unpredictable conditions could be.

“In the last 24 hours, we have seen in Sydney how quickly the situation can change,” he said at the bank’s AGM.

NAB also promised to deliver better returns for shareholders in 2021.

Travel and aviation stocks were also dented by renewed outbreak fears that prompted the majority of other states and territories to reintroduced border restrictions with NSW.

Qantas closed the day down 3.5 per cent to $4.92 per share, while Fight Centre posted a 2.7 per cent fall to $15.86 per share, and stock in Melbourne-based Webjet finished Friday’s trading day down 1.76 per cent to $5.02 each.

Major miner Rio Tinto lifted 0.9 per cent to $117.53 per share, and its main competitor BHP rose 0.3 per cent to $43.15 per share.

Stock in Telstra was down 0.7 per cent to $3.03 each, while supermarket retailer Coles closed the session up 0.5 per cent to $18.30 per share.

Woolworths finished the trading day up 1.3 per cent to $39.99 per share, and Wesfarmers ended the session down 0.8 per cent to 51.21 per share.

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