ASX 200 tumbles over 1% as fear of COVID-19 grips global markets

Summary

  • As of 10:30 AM AEST, ASX 200 is trading 1.09% lower, while the ALL Ordinaries Index is down by 1.05%.
  • Stocks on Wall Street tumbled around 2% on Monday, as an unexpected spike in global coronavirus cases and the death toll drove investors away from equity markets.
  • Crude oil prices crashed by almost 6% on Monday on its worst day since March 2021.

On Tuesday, the ASX 200 again continued to dive lower, tracking panic selling on Wall Street and global equities market. The surging cases of the Delta variant of coronavirus across many countries, especially the US, have raised concerns about new lockdowns and a long drawn out global economic recovery.

The benchmark index fell 41 points or 0.56% at the opening, extending Monday’s sell-off of 62.1 points or 0.85%. Across the Tasman Sea, New Zealand's benchmark NZX 50 index also fell 0.7% to 12,561.1 on Tuesday.

Image Source: Copyright © 2021 Kalkine Media

Stocks on Wall Street tumbled around 2% on Monday, as an unexpected spike in global coronavirus cases and death toll drove investors away from equity markets. The Dow Jones tumbled 2.09%, to 33,962.05, while the S&P 500 was down 1.59%, to 4,258.48. Shares on the NASDAQ Composite Index also got sold off aggressively by investors, leading to a 1.06% fall, to 14,274.98 by the closing.

Inflation concerns in the US and other countries have had a whammy on the stock market. Meanwhile, on Monday, US President Joe Biden announced that retail prices for some items such as vehicles had seen a spike, although he also affirmed that the administration would keep a close eye on inflation.

Read More: ASX 200 braces to open in red as global COVID-19 spike hits US stocks

How has the market performed so far?

As of 10:30 AM AEST, Australian shares didn’t stage recovery and continued to trade near their lower levels. The ASX 200 is trading 1.09% lower, while the ALL Ordinaries Index is down by 1.05%.

Virgin Money UK PLC (ASX:VUK) is the biggest loser, falling 4.99%, followed by Unibail-Roadamco-Westfield (ASX:URW), falling 4.88%.

Data Source: ASX Website (as of 10:30 AM AEST)

Coming to the market breadth, all 11 sectors are trading in red with no relief for investors in any space. Materials and Financials are bleeding the most, having lost 1.57% and 1.07%, respectively.

Stocks which are trying to stay afloat are Oil Search Limited (ASX:OSH) and JB Hi-FI Limited (ASX:JBH), gaining 3.54% and 2.98%, respectively.  

Commodity sector update

Gold traded on a slightly negative note on Monday as the stronger US dollar and falling Treasury yields engaged bulls and bears in a tough battle. Gold miners reflected the fall in their share price as well. Shares such as and De Grey Mining Limited (ASX:DEG), Northern Star Resources Limited (ASX:NST) and Newcrest Mining Limited (ASX:NCM), are all down by 0.3%, 1.07% and 0.64%, respectively.

Read More: Top ten fully franked gold stocks with high dividend yield

Crude oil prices crashed by almost 6% on Monday in its worst day since March 2021. Finally, OPEC+ members have decided to increase supply, coupled with the fear of countries again going into lockdown triggering severe sell-off in crude oil.

Energy shares have opened with a gap down to account for this massive fall in crude oil. Shares such as Woodside Petroleum Limited (ASX:WPL), Viva Energy Limited (ASX:VEA) and Santos Limited (ASX:STO) have tanked by 2.33%, 0.71% and 4.69%, respectively.

Newsmakers

BHP Group Limited (ASX:BHP) has delivered record iron ore exports in the year to 30 June 2021, despite the expectation of a subdued performance. The iron ore miner produced 72.8 million tonnes and sold 73.7 million tonnes of iron ore in the quarter ended June 2021.

Sydney Airport Holdings Pty Limited (ASX:SYD) got hit by COVID-19 restrictions. The airport had witnessed a 56.8% drop in the number of domestic passengers and 93.8% fall in the international travelers in the March 2021 quarter, compared to the same period in 2019.

Image Source: Copyright © 2021 Kalkine Media

HUB24 Limited (ASX:HUB) reported inflows of AU$8.9 billion in FY21, including AU$3.9 billion alone In the June 2021 quarter. The Funds Under Administration now stands at AU$41.1 billion.

Santos Limited (ASX:STO) has confirmed that it had submitted a confidential proposal to seek a merger with Oil Search Limited (ASX:OSH). Oil Search shareholders would get a 37% stake in the merged entity after the merger.      

Read More: 5 leading drone stocks to look at on ASX

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