Australia: Shares fall as new virus strain clouds recovery hopes

[SYDNEY] Australian shares fell more than 1 per cent on Tuesday as a fast-spreading new coronavirus strain in Britain triggered travel restrictions all over the world and threatened to disrupt a nascent global economic recovery.

The S&P/ASX 200 index fell 1.1 per cent to 6,599.6, its lowest close since Dec 2.

Several countries across the globe have shut their borders to Britain after the country identified a mutated variant of the novel coronavirus that has killed about 1.7 million people worldwide.

Australia continued its efforts to contain a virus outbreak in its most populous state, New South Wales, which reported its lowest one-day rise in fresh cases in five days amid stringent lockdowns in the affected suburbs.

"The Covid-19 outbreak is obviously having an effect on confidence here," said Henry Jennings, a senior analyst at the Marcus Today financial newsletter.

"It doesn't matter how many cases there are, the physical problem is that if people can't do what they normally do and can't spend like they normally spend, it will certainly slow the economic recovery."

Energy stocks slumped 2.8 per cent in their biggest drop since Oct 29, as oil prices sank on border closures in several countries to contain the new virus strain. Woodside Petroleum and Santos lost 3.1 per cent and 3.3 per cent, respectively.

New Zealand's benchmark S&P/NZX 50 index ended 1.9 per cent higher at 12,842.69, marking its best single-day performance since Aug 17.

REUTERS