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Australia: Shares dip into bear market territory
[BENGALURU] Australian stocks plunged into bear market territory on Tuesday, as rising economic risks from the fast-spreading coronavirus and a recent plunge in oil prices clouded the global economic outlook.
The S&P/ASX 200 index fell as much as 3.9 per cent to its lowest since Dec 27, 2018, before cutting losses to trade 0.7 per cent lower at 5,720.60 by 0021 GMT on bargain-hunting. At the session low, the index was down more than 23 per cent from a record high hit in February.
"I think there is a little bit of bargain-hunting around. Yesterday was a pretty brutal day, so people are happy to breathe a sigh of relief," said Henry Jennings, a senior analyst and portfolio manager at Marcustoday Financial Newsletter.
Fears of a global recession due to the coronavirus outbreak coupled with a near 25 per cent slump in oil prices on Monday have sent investors into panic mode, with Wall Street witnessing overnight its biggest one-day loss since the 2008 financial crisis.
Crude prices suffered their biggest daily rout since the 1991 Gulf War in the previous session, as top producers Saudi Arabia and Russia began a price war that threatens to overwhelm global oil markets with supply.
Meanwhile, the Australian government prepares a fiscal stimulus to ward off recession risks as the virus outbreak has hit confidence and consumer spending. The tally of virus cases rose to more than 80.
Heavyweight financials accounted for most of the losses, with all the Big Four lenders declining in a range of 0.2 per cent of 1.4 per cent.
Healthcare stocks fell 1.5 per cent, pulled down mainly by benchmark major CSL and Nanosonics, both losing about 2 per cent each.
Losses in bullion stocks weighed on the metals and mining index. Gold miners Resolute Mining and Evolution Mining lost more than 6 per cent each.
"Lots of people have been hiding in gold and when it's time to come out from under the bed, you would see a sell-off in gold as people move back into riskier equity assets as they are waiting for a buying opportunity," added Mr Jennings.
Diversified miner Rio Tinto, however, gained about 0.5 per cent following heavy losses in the previous session, while top player BHP traded little changed.
Energy stocks gained more than 3 per cent on higher crude oil prices, with Cooper Energy and Beach Energy tacking on about 7 per cent each.
New Zealand's benchmark S&P/NZX 50 index extended losses, shedding nearly 3 per cent. Movie software maker Vista Group was the top percentage loser, declining about 10 per cent.