Views Article – Sharenet Wealth

Australasia, News

Australian shares down nearly 1% as dismal jobs data, virus relapse weigh

* Australia’s May unemployment rate highest in 19 years

* NZ Q1 economy shrinks by most in three decades

* Investors fear spike in COVID-19 cases in China, U.S. states (Updates to close)

By Shreya Mariam Job

June 18 (Reuters) – Australian shares ended lower on Thursday as the country’s unemployment rate jumped to the highest in about two decades, while a spike in fresh COVID-19 cases globally assuaged hopes of a quick economic rebound from the pandemic-induced recession.

The S&P/ASX 200 index ended down 0.92% at 5,936.8 points. The benchmark closed 0.8% firmer on Wednesday.

Employment in May plunged a further 227,700 after a record slump of about 600,000 in April, figures from the Australian Bureau of Statistics showed, highlighting the magnitude of economic damage wreaked by the coronavirus crisis.

Investors, however, expect the gradual reopening of the economy to reverse a margin of these job losses soon.

“The third phase of easing will not take place in most states until July, so we may see any job gains limited in size, and concentrated in lower-paying part-time work, probably in retail sectors,” an ING note said

Meanwhile, New Zealand also felt the impact of the pandemic, recording a 1.6% contraction in economic growth in the March quarter, the largest drop in 29 years.

Investor confidence was further shaken by a rise in new infections across the world with the worldwide cases crossing 8.36 million.

Mining and material stocks dropped the most, posting a 1.3% decline with iron ore miner Fortescue Metals Group Ltd losing 4.2% amid volatility in the prices of the steel-making commodity.

Energy stocks recouped much of their early losses to close 0.3% lower.

Shares of Ampol Ltd were down 2.4%, while Viva Energy Group Ltd lost 1.7%.

New Zealand’s benchmark S&P/NZX 50 index dived 1% to finish the session at 11.225.28, with new COVID-19 cases in the country adding to the dour sentiment.

The top percentage losers in the benchmark were Tourism Holdings Ltd, down 6.5%, followed by Air New Zealand Ltd losing 5.7%.

(Reporting by Shreya Mariam Job in Bengaluru, Editing by Sherry Jacob-Phillips)

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