So much for the ASX’s sharp 3% plus rise on Wednesday – the Australian market turned out to be an outlier as other markets started April and the new quarter deeply in the red.
Judging by overnight trading on the ASX futures platform, the local market will start heavily negative this morning with a loss of nearly 170 points or more than 3%.
It was down 75 points around 5 am, so the fall in the final two hours of the session was sharp and points to a return to reality for the ASX and yesterday’s optimistic punters.
Markets in Asia and Europe slumped – the cause – COVID 19 with record deaths in the UK, a surge in US cases and deaths and grim forecasts for a death toll for the US of over 200,000.
So it was no wonder the three major Wall Street measures all lost 4% or more and stood as a rebuke to the silly optimism seen in Australia on Wednesday when the ASX ended up 3.4%.
For the S&P 500 index, its decline of 4.44% represents the index’s worst first day of any quarter on record – a reminder of just how strained US markets are in this crisis compared to the GFC and Black Monday in 1987.
The Dow’s fall of 974 points (4.4%) was the worst fall for the first day of a month. At one stage in late trading, the Dow’s losses had risen past the 1,000 point mark. It was the worst start to a quarter in history as well. Nasdaq lost more than 339 points or 4.41% as well on a miserable day of trading.
Oil and gold weakened as did iron ore and copper (which is the best indicator at the moment about China’s health). That sets up losses in the miners locally today
The US dollar rose (helping crimp commodities and the Aussie dollar fell under 61 US cents to be down around 60.65 US cents at 7.30 am Thursday. Bond yields eased again with the yield on the 10 year US treasury down to 0.60% and the yield on the Aussie 10 year security down to 0.65%
Japanese stocks took some of the day’s heaviest losses, down 4.5 percent, after a survey of business sentiment there fell to its worst result in seven years.
The Stoxx 600 pan European index slumped 2.9%, Germany’s Dax lost 3.9%, France’s CAC fell 4% and Britain’s FTSE 100 fell 3.8% after big banks there scrapped dividend payments, part of a worldwide effort by companies and households alike to conserve cash.
South Korea’s Kospi fell 3.4%. Hong Kong’s Hang Seng lost 2.1%, while the Shanghai Composite slipped 0.9%. Singapore’s benchmark index fell 1.7%, while stocks were up in Taiwan and Indonesia.
While the ASX 200 had a relatively stable session moving gradually higher all day it again jumped at the close ending up at 5,258.6, a one day gain of 181.77 points or 3.58%.
The energy sector outperformed with gains of 7.5% – an odd gain given that oil prices remained low overnight with no good news about at all.
That didn’t stop punters and others from chasing oil shares all day and as a result, each Energy shares jumped 13.5% to 1.30. Santos shares rose 9.6% to $3.75, Woodside shares were up 7.8% at $19.64 and Oil Search shares added 12.6% to $2.68.
Communications were up 5.3% thanks to a 4.2% rise in Telstra shares to $3.20.
Shares in the biggest listed car dealer, AP Eagers gained nearly 15% to $3.48, shares in energy engineer and contractor, Worley increased 14.5% to $7.04, Challenger shares were up 14% to $4.56.
The biggest fall was a 7% drop in WiseTech shares to $15.90. Plumbing products company Reliance Worldwide shares fell 6.2% to $2.44.
