The ASX is likely to open lower on Monday due to a sharp fall on Wall Street from Friday. Image by AP PHOTO

market and exchange

ASX set to open lower amid virus concerns

2020-06-28 11:46:13

Australia’s share market could be in for a “rough” week as ongoing concerns of a second wave of coronavirus cases in the United States continue to play havoc with the global economy. 

The ASX is likely to open lower on Monday due to a fairly sharp fall on Wall Street from Friday, as the Dow Jones index fell 730 points, which is about 2.8 per cent, while the S&P 500 fell about 2.4 per cent, AMP Capital’s chief economist Shane Oliver said. 

Dr Oliver says the ongoing virus concerns in US states such as Florida and Texas have slowed down the reopening of the economy in a similar – but far less impactful way – as Victoria. 

“They’re not reversing the reopening but they’re slowing it down,” he told AAP on Sunday.  

Dr Oliver said the futures contracts fell 91 points, about 1.6 per cent, which suggests the Australian market will fall about 90 points at the open on Monday, “which basically reverses the rally we saw on Friday.”

“Our market rose about 86 points on Friday which is about 1.5 per cent,” he said.

“I suspect it’s going to be another rough week. Last week our market fell only slightly… but I expect as long as these concerns remain about second waves we’re going to see continued volatility in the share market and maybe some more weakness in the week ahead.”

Dr Oliver said the end of the financial year this week marks “the line in the sand” which will show the share market down for the year. 

He says the sector will be looking out for business figures to be released from China and the US this week to monitor economic recovery as well as ABS statistics on payroll employment and wages, building approvals and retail figures. 

The Australian dollar “seems to be stuck”, buying at 68.6 cents on Saturday.

“The Aussie dollar normally goes up when the global economy recovers but given there’s these concerns around coronavirus that recovery seems to have come to an end,” Dr Oliver added.