ASX slumps by 1.7% in early trade

Shares have slumped by 1.7 per cent in early trade on the Australian market after the top US infectious disease expert warned of re-opening the economy too soon.

The S&P/ASX200 benchmark index was lower by 95.4 points, or 1.77 per cent, to 5307.6 points after the first 15 minutes of trade on Wednesday.

The All Ordinaries index was 96.8 points lower, or 1.76 per cent, at 5400.5.

All sectors were lower. Property and energy were faring the worst – down 3.47 and 3.02 per cent respectively.

Commonwealth Bank says it will sell a 55 per cent stake in its Colonial First State wealth management unit and announced an additional provision of $1.5 billion for the potential longer term impacts of COVID-19.

CBA will sell the CFS stake to global investment firm KKR for $1.7 billion, with the sale price representing a multiple of 15.5 times CFS’s net profit.

Shopping centre owner GPT Group says more than half the shops at its centres are trading this week, more than the 35 per cent in late April.

However returning to the workplace too soon may have its consequences.

In the US, top infectious diseases expert Dr Anthony Fauci told Congress that if the economy reopens too soon, it could not only cause “some suffering and death that could be avoided, but could even set you back on the road to try to get economic recovery.”

US indices dropped after the comments.

Meanwhile Australia has been blindsided after China suspended beef imports from four abattoirs, escalating trade and diplomatic tensions between the two nations.

Eighteen per cent of Australia’s beef production is exported to China, with exports worth more than $3 billion a year.

Beijing had previously warned trade could suffer if Prime Minister Scott Morrison continued to call for an investigation into the origins of the coronavirus.

One Australian dollar was buying 64.55 US cents at 1015 AEST, down from 64.70 US cents at the close of trade on Tuesday.

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