ASX finishes lower as COVID hits Christmas in both Australia and abroad

Australia shares fall as new virus strain clouds recovery hopes
Third straight ASX loss casts rally doubt
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ASX finishes lower as COVID hits Christmas in both Australia and abroad

Losses from miners and major banks caused Australia’s stock market to finish lower on Tuesday, after a reportedly new strain of COVID-19 in the UK hit European stocks and Sydney battles with its own resurgence of the virus.

The S&P/ASX200 finished 1.05 per cent lower on Tuesday at 6599.6.

BHP Group was down 1.8 per cent to $42.89, Rio Tinto fell 2.7 per cent to $115.41 and Fortescue Metals Group dropped 2.3 per cent to $23.48.

The bottom performing stocks at close were Silver Lake Resources down 6.79 per cent and Ramelius Resources down 5.97 per cent.

The ASX 200 also closed flat on Monday in the face of a fresh outbreak of the pandemic in Sydney. That followed a fall on Friday.

Bio-tech company Mesoblast closed 5.7 per cent lower at $2.17, off the back of the company’s announcement last week that its COVID-19 treatment trial was not living up to expectations.

Meanwhile, oil prices plunged as tighter restrictions and fresh travel curbs sparked worries about a slower recovery in fuel demand.

As a result, the Australian energy index tumbled more than 2 per cent to hit its lowest since November 23.

A2 Milk company was the market’s best performer, closing almost 5 per cent higher. And superannuation management company Netwealth closed the second-best performer, adding 2.9 per cent to its share price on Tuesday.

ABS data shows cheer before last-minute party pooper

Preliminary retail data from the Australian Bureau of Statistics for November has shown a massive surge in sales of 7 per cent.

That data shows the surge in shopping as Melbourne was released from its second lockdown and Victoria’s borders started to reopen with other states. Black Friday sales were another sweetener.

Overall, Victoria saw a large rise of 21 per cent. Excluding Victoria, retail sales rose 2.7 per cent.

Overall, turnover increased 13.2 per cent when compared to November 2020.

COVID cases across Greater Sydney have thrown Christmas plans into doubt.(AAP: Dan Himbrechts)

However, the data is old news compared to the developing situation in Greater Sydney as it battles another outbreak of the virus.

Research from ANZ and Roy Morgan Australia out today said consumer confidence was ending the year on a “downbeat note”.

It rallied as border restrictions were eased nationally in November but the research found consumer confidence lost 2 per cent in the weekend before Christmas as Sydney’s outbreak developed.

“The emergence of a major COVID-19 cluster in Sydney has dampened consumers’ otherwise positive sentiment,” ANZ head of Australian economics, David Plank, said.

“In Sydney, confidence was down 5.3 per cent in its sharpest weekly drop since July. In the rest of New South Wales, it moderated by 1.9 per cent.

“Confidence weakened in Victoria, down 2.9 per cent, along with Queensland and Northern Territory.

The Australian dollar is currently 0.1 per cent down to 75.75 US cents.

European stocks hit by UK pandemic

On Monday, European stocks took a hit in the face of the new strain of COVID-19.

Rapidly spreading infections in southern England are being blamed on a new, highly-infectious coronavirus variant. Countries across the world have halted air travel to the UK, while France has banned trucks from entering for 48 hours.

European shares fell on Monday in their worst session in almost two months.

The pan-European STOXX 600 index was down 2.3 per cent, its lowest close since mid-November, after the UK imposed an effective lockdown and reversed plans to ease curbs over Christmas.

Main indexes in Germany, France, Spain, and Italy all dived close to three per cent. 

Spain’s IBEX posted its worst day in six-months.

US stocks have mixed results

Over in the US, at one point during Monday trade, the Dow took a sharp fall, but financials have helped the blue-chip benchmark recover to finish just above its open (+0.1pc) at 30,216 points.

The S&P 500 shed 0.4 per cent after a rocky trade and the Nasdaq was down 0.1 per cent.

That comes as US Congress worked out a pandemic relief agreement after months of partisan wrangling.

The $900 billion package is expected to pass on Monday (US time) and includes unemployment aid and steers money to small businesses, airlines, transit systems and vaccine distribution.

Tesla stocks have settled after initially soaring on its S&P 500 debut.(AP: Jeff Chiu)

During trade, electric car maker Telsa also became the most valuable company ever added to the S&P 500 and will account for about 1.69 per cent of the index.

They have since dropped off this high by more than four per cent.

Tesla’s shares had surged some 70 per cent since mid-November, when its debut in the S&P 500 was announced.


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