Australia: Shares fall most in over 11 years on virus fears, oil price crash

[BENGALURU] Australian shares were hammered on Monday as investors scurried for safe havens on mounting fears of a deeper economic fallout from the rapidly spreading coronavirus outbreak, and oil prices dived more than 20 per cent.

The S&P/ASX 200 index fell 5.6 per cent in its biggest intraday drop since Nov 13, 2008 and was down 338.50 points, or 5.5 per cent, by 0103 GMT. It declined 2.8 per cent on Friday.

"There is no handbrake at the moment. It is complete capitulation," said James McGlew, executive director of corporate stockbroking at Argonaut.

"More than the rising (coronavirus) cases domestically, Australia is hit due to the economic uncertainty surrounding its top trade partner China and you throw in the oil crisis, it is mayhem," he said, adding that: "Fear is by far the greatest driver in this market today."

Oil futures suffered their biggest daily loss since 1991 on Sunday after Saudi Arabia slashed its official selling price and announced plans to raise crude production significantly, signalling the start of a price war after Russia balked at Opec's proposed steep production cuts to stabilise prices.

By last week, Australia had recorded 60 cases of the virus while two elderly people had died, and the prime minister warned the public bill for treating infected patients could top US$661 million.

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Meanwhile, the number of people infected with coronavirus topped 107,000 globally as the outbreak reached more countries.

Energy stocks recorded their biggest ever intraday percentage drop, slumping as much as 19 per cent. Oil Search and Santos lost about a quarter of their market values.

The metals & mining index also bled heavily, dropping more than 6 per cent after prices of copper, aluminium and other industrial metals slumped on Friday.

Top miner BHP Group declined more than 13 per cent to its lowest level in nearly two years, while Rio Tinto dropped over 6 per cent in its worst session since June 2016.

Financials too fell, shedding more than 5 per cent. The Big Four lenders lost in a range of 4 per cent to 5 per cent.

Among gainers, gold stocks climbed more than 2.3 per cent as investors rushed to the safety of bullion.

Across the Tasman Sea, New Zealand's benchmark S&P/NZX 50 index fell 2.7 per cent.

Air New Zealand slumped 4.4 per cent to its lowest level since November 2016 after the company withdrew its full-year earnings outlook and froze hiring, and said it would cut more capacity because of increased uncertainty over the scale of the outbreak.

REUTERS