Australia: Shares dip as Europe Covid-19 woes spark recovery fears

[BENGALURU] Australian shares fell on Monday (Nov 22) as a resurgence of Covid-19 cases in Europe prompted fresh lockdowns and painted a bleak picture of post-coronavirus recovery for the global economy.

The S&P/ASX 200 index closed 0.59 per cent lower at 7,353.1 after 2 straight sessions of gains.

Argonaut's director of equity sales, Damian Rooney, said the market was down because of "a poor lead out of the US on Friday (Nov 19) night and the weekend news, particularly on the situation in Europe."

Travel stocks were among the top losers, with 3 of the top 10 decliners on the benchmark index belonging to the sector.

Travel management firms Flight Centre Travel Group and Corporate Travel Management, and carrier Qantas fell between 4 per cent and 7.1 per cent.

Banking stocks closed 1.4 per cent lower after hitting their weakest level since Aug 2. The so-called "Big Four" banks lost between 1.2 per cent and 2.1 per cent.

Rooney attributed the sell-off to last week's brokerage downgrades in the sector after Commonwealth Bank of Australia became the third lender among the top four to flag margin pressures, and the weaker Australian dollar.

Energy stocks dropped 1.6 per cent, hitting their lowest in nearly a month as oil prices slid to a 7-week low.

Miners rose 0.5 per cent, offering some support to the benchmark index. Iron ore prices jumped 4 per cent, sending sector heavyweights BHP Group, Rio Tinto and Fortescue up between 0.4 per cent and 2.1 per cent.

Vulcan Energy climbed 7.1 per cent to become the second-highest gainer on the index after it signed its second supply agreement with Renault for battery-grade lithium chemicals.

New Zealand's benchmark S&P/NZX 50 ended 1.04 per cent lower at 12,607.64, with Meridian Energy hitting a more than 16-month low on selling its Australian unit.

REUTERS