Australia Market drops on U.S. stimulus concerns

The Australian share market finished session lower on Thursday, 22 October 2020, as investors mood dented amid ongoing uncertainty as to whether a new round of COVID-19 stimulus measures for the virus-hit U.S. economy will be enacted before the U.S. presidential election. Market sentiment was also dampened on concerns of allegations that Russia and Iran were interfering in the US election process.

At closing bell, the benchmark S&P/ASX200 index fell 18.05 points, or 0.29%, to 6,173.75. The broader All Ordinaries dropped 19.35 points, or 0.3%, to 6,383.73.

The Australian market fell from the outset after an overnight decline on Wall Street, as investors grew pessimistic of the chances that a fresh coronavirus relief package in the United States will be agreed on before the Nov. 3 presidential election.

Stocks struggled for direction for much of the day as investors opted to stand on the sidelines ahead of major market-moving events, such as the next and last U.S. presidential debate between Republican incumbent Donald Trump and Democratic Party challenger Joe Biden on Thursday.

Locally the energy sector saw the heaviest declines following a sharp drop in global oil prices. Oil prices tumbled up to 4% overnight on concerns over softer US demand and a big lift in weekly US crude supplies. Oil Search (OSH) was one of the weakest performers, down 3.7%.

Two of the larger local oil & gas producers, Woodside (WPL) and Santos (STO) both dropped 1.6% after releasing quarterly production updates this morning. WPL reported its Sept Qtr production, up slightly on the year before, lifting 2% to 25.3mmboe with sales volumes also up year on year to 26.7mmboe. However with the large drop in oil prices, revenue fell 42%.

Santos (STO) also reported a lift in production, with 3Q20 a record quarter of 25.1mmboe. Sales volumes were also higher. While the average oil price is up on 2Q20, revenue year-to-date in 2020 is down on the same time in 2019 with a 33% drop in the average realised oil price.

Westpac (WBC) ended down 0.5% after confirming it sold its ~55.2 million shares in BNPL provider ZipCo (Z1P) at $6.65 a share. It announced earlier this week it is teaming up with rival Afterpay (APT). Z1P closed down 5%.

Wealth manager, AMP Ltd (AMP) fell 5.5% after releasing a quarterly update for Assets Under Management (AUM). AUM fell 0.4% to $189.2 billion for its AMP Capital division with net cash outflows of $1.1 billion. AUM for its Australian wealth business saw a slight lift to $121.4 billion.

CURRENCY NEWS: The Australian dollar changed hands at $0.1057 after touching an earlier high of $0.7119.

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