Australia: Shares hit near two-month low on Omicron variant concerns

[BENGALURU] Australian shares dropped more than 1 per cent to hit a near two-month low on Monday, extending losses to a second straight day, as concerns over the cases of coronavirus' Omicron variant hitting economic recovery sparked a broad sell-off.

The S&P/ASX 200 index fell as much as 1.36 per cent to 7,180.3, its lowest level since Oct 1, after a 1.73 per cent drop on Friday.

Australia on Sunday confirmed two cases of the new Omicron variant, putting the country's reopening plans in jeopardy, as a growing number of countries report the highly infectious strain, and sparked concerns of threat to the economic recovery.

All three major US indices posted their biggest single-day falls in months on Friday, while oil prices plunged US$10 a barrel to mark their largest one-day drop since April 2020.

Australian banks declined 2 per cent to hit their lowest since late-April, weighing the most on the benchmark.

The country's "Big Four" lenders also fell, with Commonwealth Bank of Australia and National Australia Bank losing 2.2 per cent each.

Travel stocks tumbled to their multi-month lows, with travel management firms Flight Centre Travel Group, Webjet and Corporate Travel Management losing between 6 per cent and 11 per cent, while carrier Qantas Airways dropped 6 per cent.

Energy stocks were the top losers, declining as much as 4.7 per cent to their lowest level since Sept 21.

Oil regained more than US$3 in early Asia trade but major oil companies including Woodside Petroleum, Santos and Oil Search lost between 5 per cent and 7 per cent.

Bucking the subdued sentiment, lithium developer Vulcan Energy rose as much as 3.2 per cent, after signing a five-year supply deal, with Dutch automaker Stellantis NV.

New Zealand's benchmark S&P/NZX 50 index lost 0.8 per cent to 12,533.83 as at 2348 GMT.

Westpac and Australia and New Zealand Banking Group were the top losers in the index, while logistics firm Mainfreight Ltd declined over 2 per cent.

REUTERS