Australia shares post worst session in week as fresh lockdown weighs


  • Markets
  • Wednesday, 08 Jul 2020

AUSTRALIAN shares ended 1.5% lower on Wednesday, their worst session in more than a week, as investors refrained from making big bets after a lockdown was reimposed in the country's second-most populous state, slowing a broader national recovery.

Australia could take an economic hit of as much as A$1 billion ($700 million) each week because of coronavirus restrictions imposed again by the state of Victoria, Treasurer Josh Frydenberg said on Wednesday.

The S&P/ASX 200 index was down 1.5% at 5,924.1 at the end of trade.

"The market has been driven for the last few weeks by the fact that we are slowly recovering and picking up, and this is certainly a roadblock," said James Tao, market analyst at CommSec.

"Melbourne as the second-largest city here has significant contributions to the economy ... the restrictions will certainly have an effect on the September GDP numbers too." Meanwhile, the extension of the loan repayment deferral period for borrowers struggling to service their debts by Australia's peak banking body weighed on financial stocks.

The financial sub-index lost 1.6%, with the "Big Four" banks dropping between 1% and 2.1%.

"That a number of businesses and households are still having trouble repaying their loans is something to look out for ... the impact of this on the bank's balance sheet will also effect the economy's health", Tao said.

Energy stocks fell 1.5%, led by Viva Energy Group Ltd as oil prices dipped on data showing a build in U.S. crude stockpiles, raising oversupply fears.

Healthcare stocks were also trading lower, with heavyweight CSL Ltd dropping 3.3%.

Bucking the sombre mood, gold stocks advanced as prices of the safe-haven metal lingered near a more than eight-year peak as fresh COVID-19 cases rose.

Across the Tasman Sea, New Zealand's benchmark S&P/NZX 50 index closed 0.3% lower, with Mainfreight Ltd being one of the biggest laggards after dropping 3%. - Reuters

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Australia , ASX200 , lockdown

   

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