ASX Plunges 2.5 Percent as COVID-19 Cases Surge

June 25, 2020 Updated: June 25, 2020

The Australian share market has suffered its worst loss in two weeks after a rise in coronavirus cases in both the United States and Victoria.

The benchmark S&P/ASX200 benchmark index finished Thursday down 148 points, or 2.48 percent, to 5,817.7, while the broader All Ordinaries index closed down 153.6 points, or 2.53 percent, at 5,928.

“You’re still seeing a lot of uncertainty, which is why the market fell in the first 10 minutes of trade, and continued to fall throughout the day,” said Bell Direct market analyst Jessica Amir.

IG Market analyst Monte Safieddine wrote in a note that downside risks had been exposed on multiple fronts, including US-China tensions including the possibility of fresh sanctions, an IMF downgrade to economic projections, and the resurgence in coronavirus cases.

Another 33 coronavirus cases were found in Victoria, while in the U.S., cases were surging to their highest levels since April. 

The losses on Thursday were across the board and came after a similar plunge on Wall Street, where the Dow Jones, the S&P500 and the NASDAQ lost between 2.2 and 2.7 percent.
Battered down companies were among some of the worst performers, which Amir attributed to selling to capture a loss for tax reasons in one of the last trading sessions before the close of the financial year.

Ardent Leisure dropped 12.2 percent to 39.5 cents; Flight Centre drooped 11 percent to $11.46; Ooh! Media fell 8.8 percent to 93 cents; and Webjet retreated 8.6 percent to $3.39.

Qantas shares were in a trading halt after the airline announced a $1.9 billion equity raising and that it would cut at least 6,000 jobs.

“A sad day for the 6,000 people who lost their jobs, but if you’re a shareholder, there’s light at the end of the tunnel, because they’ve said they’re going to make a profit or break even,” Amir said.

CSL was a rare gainer, adding 0.5 percent to $294 after the blood products giant, Australia’s largest company by ASX-listed market capitalisation, agreed to pay around $2.9 billion for exclusive rights to a gene therapy treatment that could potentially cure haemophilia B.

US company uniQure produces the program called etranacogene dezaparvovec, or AMT-061.

Also, Accent Group gained 9.6 percent to $1.49 after the Athlete’s Foot and Hype DC owner forecast its full-year earnings would be 10 percent ahead of last year, noting that online sales had continued to strengthen despite its stores reopening.

All the big banks were lower, with Westpac and NAB both down 3.5 percent, to $17.42 and $17.91; ANZ dropping 3.1 percent to $18.25 and CBA down 2.3 percent to $67.65.

In the heavyweight mining sector, BHP dropped 2.4 percent to $35.05, Rio Tinto fell 1.6 percent to $97.06 and Fortescue Metals drooped 2.6 percent to $13.87.

Goldminers were no safe haven, with Evolution falling 5.4 percent, Northern Star down 4.2 percent and Newcrest down 3.0 percent.  

Online artist marketplace Redbubble soared 25.5 percent to an all-time high of $1.97 after announcing its operating profit had more than doubled in the first 11 months of the fiscal year.

The Australian dollar was buying US$0.6865, down from US$0.6941 at the close of trade on Wednesday.

* The benchmark S&P/ASX200 index on Thursday closed down 148 points, or 2.48 percent, at 5,817.7 points
* The All Ordinaries closed down 153.6 points, or 2.53 percent, at 5,928 points
* At 1750 AEST, the SPI200 futures index was down 25 points, or 0.43 percent, at 5,739 points

One Australian dollar buys:
* 68.64 US cents, from 69.23 US cents on Wednesday
* 73.63 Japanese yen, from 73.80 yen
* 61.09 euro cents, from 61.27 cents
* 55.23 British pence, from 55.42 pence
* 106.78 NZ cents, from 107.33 cents.

By Derek Rose