Early drop for ASX after US jobless rise

Shares have dropped in early trading on the Australian market in response to US investors’ gloom from a worsening coronavirus crisis and higher unemployment.

The S&P/ASX200 benchmark index was lower by 56.0 points, or 0.92 per cent, at 6038.5 points after the first 30 minutes of trade on Friday.

The All Ordinaries index was 56.2 points, or 0.90 per cent lower, at 6157.7.

Property suffered the biggest hit, down 1.56 per cent.

Information technology fell 1.5 per cent, and health was down 1.3 per cent.

Insurer IAG has flagged disappointing full-year results are likely next month after it reported low growth in gross written premiums.

It will not pay a dividend.

Shares in the company were down 5.46 per cent to $5.45.

Shopping centre owner Vicinity Centres said the value of 60 properties dropped 11.3 per cent over the six months to June 30 due to COVID-19.

The company’s shopping centres have had more vacancies during the pandemic, and deferred rent payments.

The news prompted investors to sell, and the share price fell 2.31 per cent to $1.37.

There were big losses in gold mining. Evolution lost 6.18 per cent to $5.92 a day after reporting its best quarter of gold production for the financial year, and record operating cash flow.

Northern Star dropped 3.71 per cent to $15.31 and Newcrest slipped 2.01 per cent to $34.09.

Other miners were more stable. BHP edged lower by 0.01 per cent to $37.24, Rio eased down 0.02 per cent to $103.45 and Fortescue lost 0.98 per cent to $16.21.

The big banks all lost ground. ANZ had the biggest fall of the four, lower by 1.02 per cent to $18.41, the Commonwealth slipped 0.52 per cent to $73.36, NAB declined by 0.66 per cent to $18.11 while Westpac stumbled by 1.0 per cent to $17.91.

In the US, investors were surprised by data that showed jobless claims reached 1.416 million last week.

The increase of 109,000 claims broke a stretch of 15 consecutive weeks of improvements.

Congress kept working to pass more economic stimulus. Senate Republicans said they could present their version of the bill to Democrats as early as this week.

Total US coronavirus cases have topped 4 million, and there were nearly 2600 new cases every hour on average, according to a Reuters tally.

The Dow Jones Industrial Average fell 353.51 points, or 1.31 per cent, to 26,652.33, the S&P 500 lost 40.36 points, or 1.23 per cent, to 3,235.66 and the Nasdaq Composite dropped 244.71 points, or 2.29 per cent, to 10,461.42.

The Australian dollar was trading at 71.11 US cents at 1030 AEST, lower from 71.52 US cents at Thursday’s close.

Be the first to comment

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.