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Australasia, News

Australian shares fall on worries about slower economic recovery

By Soumyajit Saha

June 22 (Reuters) – Australian shares fell on Monday as rising cases of the novel coronavirus in the country and around the world diminished hopes of a quick recovery from a pandemic-induced economic downturn.

The S&P/ASX 200 index fell 0.82% to 5,893.6 in early trade. The index is down 11.09% so far this year.

Investors turned risk-averse after Australia’s second most populous state Victoria extended its state of emergency for four more weeks to July 19 and global COVID-19 cases crossed 8.88 million.

Denting sentiment further were views from the Minneapolis Federal Reserve Bank president, who last week said an economic recovery could take longer than expected, and that fall could potentially bring a second wave of infections.

Among sectors and individual stocks, financials fell over 1%, with all of the “big four” banks trading lower.

The energy subindex fell 1.66​%, led by a 3.1% decline in Worley Ltd.

Brent crude futures though rose 0.5%, while U.S. West Texas Intermediate (WTI) crude gained 0.1%.

Industrial stocks also dropped, with Transurban Group losing over 2% after announcing a lower distribution for the six months ending June 30.

Bucking the wider trend, gold stocks rose 4.16%, led by Ramelius Resources Ltd that rose 13.97% after the company upgraded its FY20 production outlook.

Prices of the yellow metal rose 0.43% to $1,750.30.

The top percentage gainer on the was Austal Ltd , up 11.01% after the U.S. Department of Defence agreed to invest $50 mln in Austal USA.

The number of issues on the ASX that advanced were 383, while 660 declined.

Across the Tasman Sea, New Zealand’s benchmark S&P/NZX 50 index fell 0.6% to 11,187.5.

Heavyweight A2 Milk Company Ltd fell over 4%, after confirming it was in discussions multiple parties in relation to potential strategic options relating to manufacturing capabilities. (Reporting by Soumyajit Saha in Bengaluru; editing by Uttaresh.V)

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