Australia Stocks tumble to fresh three week lows

The Australian share market tumbled to fresh three week lows on Thursday, 29 October 2020, following an overnight plunge on Wall Street, amid mounting concerns over the pace of the global economic recovery from the COVID-19 pandemic after sharp increases in coronavirus cases in the United States, particularly in the Midwest, and announcements by the German and French governments of new lockdown measures.

At closing bell, the benchmark S&P/ASX200 index retreated 97.40 points, or 1.61%, to 5,960.34. The broader All Ordinaries fell 93.80 points, or 1.5%, to 6,167.99.

Local declines followed heavy selling in Europe and on Wall Street following rising concerns for the global economy on surging COVID-19 cases in the northern hemisphere. The U.S. has averaged more than 70,000 new coronavirus cases a day over the past week, with 29 states setting new records this month for the most new daily cases since the pandemic began in February. More than 8.78 million cases have been reported nationwide and at least 226,000 people have died of COVID-19, according to data from John Hopkins University (JHU). According to JHU, the average number of daily new cases this past week is up 21% compared to the previous week. The jump in new infections has also been accompanied by an increase in hospitalizations and deaths, leading to worries about new lockdowns.

In Europe, Germany and France announced tough new restrictions on businesses Wednesday in a bid to stem the spread of the coronavirus as the countries deal with worsening outbreaks.

Declines were broad based with selling led by the IT, materials and energy sectors. Heavyweight miners like BHP Group (BHP) and Rio Tinto (RIO) dragged the broader market with BHP down 2.2% and RIO 1.1% lower. Fortescue Metals (FMG), was only a handful of winners with the pure play iron ore miner reporting record first quarter iron ore shipments of 44.3mt, 5% higher than the year before.

Traditional safe havens in gold stocks also underperformed on weaker gold prices. Northern Star (NST) and Saracen (SAR) were down 5% each. Meanwhile Newcrest Mining (NCM) lost 3.9% on a quarterly update. Gold production fell 12% to 503koz due to outages at a number of its mining sites, while costs also rose on the previous quarter.

ANZ Bank (ANZ) led the big 4 banks lower, down 2.4%, after its second half cash profit slumped 42% to $3.75 billion, down from $6.5 billion last year. The drop was due to a significant increase in provisions and impairments. The final dividend was also slashed by 56% to $0.35 per share.

CURRENCY NEWS: The Australian dollar changed hands at $0.7052 after yesterday's sharp drop from above $0.712.

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