Australian shares suffer second-worst week ever

The Australian sharemarket has suffered its worst day in over four years, closing the day at a six-month low amid a growing panic the coronavirus outbreak will trigger a global recession.

The S&P-ASX 200 index finished on Friday down 216.7 points, or 3.25 per cent, at 6441.2, while the all ordinaries index plummeted 225.9 points, or 3.35 per cent, to 6511.5.

For the week, the ASX 200 lost 697.8 points, or 9.77 per cent, for its second-worst string of losses, exceeded only by a 15.65 per cent dive in October 2008 during the global financial crisis.

Since hitting an all-time high of 7197.2 last Thursday, it has declined for six-straight days, losing 756 points, or 10.5 per cent.

That means it is now in official correction territory, having suffered a drop of more than 10 per cent from a recent highs.

Friday’s 3.25 per cent dive was the worst since a 3.8 per cent, or 195-point drop on September 29, 2015.

“Today felt like panic selling,” said Pepperstone head of research Chris Weston.

“Whether this was a capitulation or there is more to it, this felt different“ from the substantial declines earlier in the week, Mr Weston said.

“The rug got pulled from the market today. The ferocity of the selling isn’t something we have seen for a long long time,” he said.

Every sector was down at least one per cent and most fell over three, with the tech sector the worst hit, down 4.71 per cent as Afterpay plummeted 9.1 per cent to a one-month low $33.17.

The mining sector suffered the second-biggest losses, falling a collective 4.67 per cent as mining giant BHP dropped 4.5 per cent to a one-year low of $33.60, Rio Tinto fell 3.5 per cent to a five-month low of $87.27 and Fortescue Metals declined 6.4 per cent to a more than two-month low of $10.08.

Gold miners were not immune from the carnage, with Newcrest, Northern Star and Saracen all plunging between 8.0 and 9.8 per cent.

Woolworths dropped 3.5 per cent to $38.80 and Wesfarmers dropped 2.9 per cent to $40.65.

Among the big banks, Commonwealth and NAB both dropped 3.1 per cent, to $81.78 and $25.10, respectively, while ANZ dropped 2.7 per cent to $24.83 and Westpac fell 2.8 per cent to $23.64.

Harvey Norman was the biggest ASX200 loser, falling 14.1 per cent to a nine-month low of $3.71 after announcing its first-half profit had been hit by bushfires as stores in regional areas closed temporarily.

Just 14 companies among the ASX300 gained on Friday, while another six were flat.

The Aussie dollar meanwhile was dropped further, hitting an 11-year low of US65.16¢, having declined 1.6 per cent against the greenback this week and 7 per cent so far this year.

The Aussie was buying US65.22¢, down from US65.50¢ at the market close on Thursday.

Looking forward, IG market analyst Kyle Rodda said that markets were most concerned about the spread of the coronavirus in the world’s largest economy, the US, following the infection of a California woman this week.

Mr Rodda said there was a good chance there could be more coronavirus cases in reported in the US over the weekend, while Chinese factory data set to be released on Saturday (Australia time) would deliver the first good read on how the outbreak had affected the world’s second-biggest economy.

“It’s going to set up an interesting Monday morning, when trading conditions become a little thin — especially if the news flow delivers a few shockers,” he wrote in a note.

WALL STREET BLEEDS RED

Wall Street’s main indices have plunged for the sixth-straight session, with the S&P 500 confirming its fastest correction in history as the rapid global spread of coronavirus intensified worries about economic growth.

The S&P 500 finished 12 per cent below its February 19 record close, marking its fastest correction ever in just six trading days.

The previous record was nine days in early 2018, according to S&P Dow Jones Indices analyst Howard Silverblatt.

The Dow registered a record one-day points drop, which was also its fourth 1000-point decline in history and the second this week.

All three major US indices were also on track for their steepest weekly pullback since the global financial crisis, as new infections reported around the world surpassed those in mainland China.

While selling eased for a while during the session the S&P’s losses deepened rapidly in the last hour of trading to end at a session low, registering its biggest one-day percentage loss since August 18, 2011.

The CBOE volatility index, also known as the fear index, ended near its session high, up 11.60 points at 39.16, its highest level since February 2018.

The Dow Jones Industrial Average fell 1190.95 points, or 4.42 per cent, to 25,766.64 on Thursday, the S&P 500 lost 137.63 points, or 4.42 per cent, to 2978.76 and the Nasdaq Composite dropped 414.30 points, or 4.61 per cent, to 8,566.48.

The Dow ended 12.8 per cent below its February 12 record close and Nasdaq closed 12.7 per cent under its February 19 closing peak.

All of the 11 S&P sectors closed lower with real estate, technology and energy sectors all losing more than five per cent.

The best performers were the healthcare and industrials sectors, which closed down more than 3 per cent.

The NYSE Arca Airline index ended down 5.7 per cent on fears about global travel disruptions, while the Philadelphia SE Semiconductor index, which includes China-exposed stocks, fell 4.7 per cent.

Microsoft Corp, the biggest drag on the S&P, dropped almost 7 per cent after it warned of weakness in PC business due to a hit to its supply chain from the coronavirus, echoing similar statements from Apple and HP.

While it was the biggest boost for the S&P, 3M Co pared gains sharply as the day wore on, ending up just 0.8 per cent at $US150.16 after rising as high as $US155.43.

In the busiest trading session at least since July 2014, according to Refinitiv data, 15.63 billion shares changed hands on US exchanges on Thursday compared with the average 8.67 billion for the last 20 sessions.

Declining issues outnumbered advancing ones on the NYSE by a 7.51-to-1 ratio; on Nasdaq, a 5.87-to-1 ratio favoured decliners.

The S&P 500 posted four new 52-week highs and 102 new lows. The Nasdaq Composite recorded 24 new highs and 489 new lows.

with Reuters