Australia: Stocks fall on COVID-19 concerns

The Australian share market finished session lower on Tuesday, 27 October 2020, as investors mood dented amid renewed concerns over the pace of the global economic recovery from the pandemic after alarming rise in novel coronavirus cases in some European countries and the United States.

At closing bell, the benchmark S&P/ASX200 index fell 104.61 points, or 1.7%, to 6,051.02. The broader All Ordinaries dropped 1110.08 points, or 1.73%, to 6,247.22.

The Australian market suffered by sell orders with investors discouraged by sharp falls in US shares, as coronavirus counts are spiking in much of the United States and Europe, raising concerns about more damage to the still-weakened economy. The data compiled by Johns Hopkins University showed daily coronavirus cases in the U.S. have risen by an average of 68,767 over the past seven days, a record. On Sunday alone, more than 60,000 cases were reported. The country saw more than 83,000 new infections on both Friday and Saturday after outbreaks in Sun Belt states, surpassing a previous record of roughly 77,300 cases set in July. In Europe, Spain's government declared a national state of emergency on Sunday that includes an overnight curfew, while Italy ordered restaurants and bars to close each day by 6 p.m. and shut down gyms, pools and movie theaters.

Meanwhile, diminishing prospect over the White House and Republicans striking a stimulus deal with Democrats before the election also fuelled selloff. House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin spoke several times last week on potential deal to send cash to most Americans, restart supplemental benefits for laid-off workers and provide aid to schools, among other things. But deep partisan difference remains on Capitol Hill, and time is running out for anything to happen before Election Day on Nov. 3. Any compromise reached between House Democrats and the White House would also likely face stiff resistance from Republicans in control of the Senate.

All ASX sectors declined, with most falling by more than 1%. Energy and Tech stocks were the hardest hit. Technology sector was the worst performer on the Australian sharemarket, sliding by 3.3%. The Energy sector fell by 2.9% after oil prices slumped by 3.2% to three-week lows. With the spike in coronavirus cases continuing overseas, further lockdowns could reduce oil consumption.

CURRENCY NEWS: The Australian dollar changed hands at $0.7124 after seeing an earlier low of $0.7113.

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