The Australian share market has suffered its worst day in five weeks, falling alongside overseas indices after a record contraction in the US economy and rising coronavirus cases locally.
The benchmark S&P/ASX200 index dropped at the open and moved lower throughout most of the day to close down 123.3 points, or 2.04 per cent, at 5,927.8 points.
The All Ordinaries index dropped 119.2 points, or 1.93 per cent, at 6,058.3.
“Crickey, two per cent,” said Pepperstone head of research Chris Weston. “I don’t think we saw that coming at the beginning of the morning.”
Markets in Japan finished down 2.8 per cent, while the FTSE100 in London dropped 2.3 per cent, although the S&P500 was only down 0.4 per cent and New Zealand’s NZX50 rose by 0.3 per cent.
Volumes were on the light side, although as Mr Weston observed, “that doesn’t make too much different for people who bought yesterday and are underwater”.
While the reason for the sell-off wasn’t immediately obvious, Mr Weston pointed to comments by the US Federal Reserve on Thursday that the path forward was “extraordinarily uncertain”.
Economic data out of America overnight also showed the US gross domestic product dropped 9.5 per cent in the June quarter, wiping away nearly five years of growth, while jobless claims also rose.
Closer to home, Victorian Premier Daniel Andrews warned that restrictions there would likely be extended after the state identified 627 more coronavirus cases and eight deaths.
Mr Weston said all eyes would now be on the Federal Open Market Committee meeting in September.
“Where does the positive surprise come in, and where is the catalyst?” he asked.
Most good news is already priced in, while there are a number of potential risks out there, Mr Weston said.
Still the ASX200 managed to finish the month up 29.9 points, or by 0.5 per cent, for its fourth straight winning month.
But for the week it finished down 89.7 points, or 1.5 per cent, with every sector lower on Friday.
Energy stocks were the worst performers, collectively falling 3.1 per cent as Ampol dropped 3.5 per cent and Origin Energy retreated 4.6 per cent after reporting fewer LNG purchases because of the pandemic.
All the big banks were sharply lower with CBA falling 2.8 per cent to $71.20, ANZ declining 2.2 per cent to $17.96, NAB retreating 2.5 per cent to $17.66 and Westpac down 3.3 per cent to $17.09.
AMP fell 12.8 per cent to $1.465 after the financial services giant announced it expects first-half underlying profit to more than halve when its audited results are released next month.
In the heavyweight mining sector, BHP fell 2.9 per cent to $36.75, Rio Tinto declined 2.4 per cent to $102 and Fortescue Metals dropped 0.8 per cent to $17.41.
Super Retail Group was a rare winner, gaining 9.5 per cent to $8.88 – its highest level since late February – after announcing sales had boomed in May and June at its Supercheap Auto, Rebel Sports and BCF stores.
Clean TeQ Holdings fell 22 per cent to 16 cents after announcing it would recognise a $180 million non-cash writedown of its Sunrise Project, a large nickel, cobalt and scandium deposit near Fifield, NSW.
Meanwhile, the Australian dollar nudged above 72.0 US cents this morning for the first time since April 2019.
The Aussie was buying 72.22 US cents at 1620 AEST, up from 71.53 US cents at Thursday’s close.
ON THE ASX
* The benchmark S&P/ASX200 index on Friday closed down 123.3 points, or 2.04 per cent, at 5,927.8 points
* The All Ordinaries closed down 119.2 points, or 1.93 per cent, at 6,058.3 points
* At 1724 AEST, the SPI200 futures index was down 21 points, or 0.36 per cent, at 5,899 points
One Australian dollar buys:
* 72.10 US cents, from 71.34 US cents on Thursday
* 75.20 Japanese yen, from 74.92 yen
* 60.63 euro cents, from 60.67 cents
* 54.89 British pence, from 55.04 pence
* 107.50 NZ cents, from 107.69 cents.