Dow drops 256 points as global Covid-19 cases surge: ASX to open lower

Market Reports

by Melissa Darmawan

The Australian share market is set to open lower following Wall St closing in the red. All three indexes retreated for the second straight day as investors continue to monitor company earnings reports. The market has been swinging between record highs to pullbacks as investors digest the economic growth against the risks from the pandemic. The World Health Organisation warned that global coronavirus cases were increasing with the US State Department stating on Monday, that it was looking to increase their “Do Not Travel” guidance to approximately 80 per cent of the world. Currently 34 countries are listed out of the 200 which means the possibility of numbers could increase to 130 countries. Analysts expect that the sway will continue based on the pace of the vaccine rollout and the reopening of the economy. The red transcended over the Atlantic with the European market closing almost 2 per cent lower. British American Tobacco company fell 7.6 per cent at the close after a report stated that the Biden administration is considering a requirement, to reduce nicotine in cigarettes sold in the U.S. On a positive note, in the UK their unemployment rate improved to 4.9 per cent in the last three months despite their lockdown. In Asian markets which also closed almost lower after China kept their one-year loan prime rate unchanged. On the commodities front, oil fell from one-month highs on the fear that demand for fuel products could drop as coronavirus cases rise, while iron ore rose to a 9.5 year high. Back home, Prime Minister Scott Morrison outlined that the May budget will cover the next phase of the country’s economic recovery.

Figures from around the globe

Wall Street closed lower yesterday: The Dow Jones Industrial Average fell 0.8 per cent to 33,821, the S&P 500 lost 0.7 per cent to 4,135 and the NASDAQ closed 0.9 per cent lower at 13,786.

European markets closed lower, London’s FTSE lost 2 per cent, Paris fell 2.1 per cent and Frankfurt closed 1.6 per cent lower.

Asian markets closed almost lower, Tokyo’s Nikkei fell almost 2 per cent, Hong Kong’s Hang Seng gained 0.1 per cent and China’s Shanghai Composite closed 0.1 per cent lower.

Taking all of this into equation, the SPI futures are pointing to a 1.2 per cent drop.

Yesterday, the Australian share market closed 0.7 per cent lower at 7,018 snapping their winning streak.

Local economic news

Today the preliminary retail trade data for March is issued from the Australian Bureau of Statistics. It’s expected by economists to show a 0.8 to 1 per cent bounce after snap lockdowns in Victoria and Western Australia and recovery from the floods.

Company news

Yancoal Australia (ASX:YAL) reports a 17 per cent drop on coal production from the 4th quarter of last year. The company attributes the drop to the rain and flooding in NSW disrupting mining, rail and port activity. During the period, 8.7 million tonnes of attributable saleable coal was produced compared to the 9.7 million tonnes when compared to prior corresponding period. The company has kept its production guidance for this year. Shares in Yancoal Australia (ASX:YAL) closed 0.44 per cent higher at $2.27 yesterday.

Ex-Div

Kelly Partners Group (ASX:KPG) is paying 0.33 cents fully franked
Soul Pattinson (W.H) (ASX:SOL) is paying 26 cents fully franked

Currencies

One Australian Dollar at 8:00 AM was buying 77.27 US cents, 55.44 Pence Sterling, 83.49 Yen and 64.18 Euro cents.

Commodities

Iron Ore has gained 4.3 per cent to US$189.61
Iron Ore futures are pointing to 0.4 per cent gain.
Gold has added $7.80 to US$1778 an ounce.
Silver was flat to US$25.84 an ounce.
Oil was down $0.94 to US$62.44 a barrel.

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