Australia: Shares tumble 2% as US economic data paints bleak picture

[BENGALURU] Australian shares dropped more than 2 per cent on Thursday as dour US economic data and dismal earnings from Wall Street heavyweights painted a grim picture of the extent of damage from the coronavirus crisis.

US retail sales plunged to their lowest on record, manufacturing output dropped by the most in more than 74 years, and major Wall Street banks issued bleak forecasts as markets began to get some semblance of a fallout from the pandemic.

The S&P/ASX 200 erased this week's gains to trade 1.5 per cent lower at 5,387.6 points, as of 0130 GMT, with heavyweight miners and financials shedding 2.4 per cent and 2.8 per cent, respectively, as dealers braced for consumer inflation and March employment figures later in the day. Earlier in the session, the benchmark index dropped as much as 2.1 per cent.

The latest batch of data from Australia will come after surveys this week showed steep falls in business and consumer confidence, as lockdown measures to curb the virus put the country at risk of its first recession in three decades.

A Reuters poll forecasts employment to fall by 40,000 for March. Analysts at ANZ Research expect the unemployment rate to rise to 5.3 per cent, and said greater losses would become evident next month.

An index of energy firms sank 2.3 per cent even though crude prices came off 18-year lows hit overnight. Woodside Petroleum, which reported lower first-quarter sales revenue on Thursday, weakened as much as 3 per cent.

"The market is gradually leaning towards a combination of deeper Opec+ cuts and a more assured response from the G-20 producers to avoid a further collapse in oil," said Stephen Innes, chief global markets strategist at AxiCorp.

Shares of Crown Resorts skidded 2 per cent after the casino operator said it has stood down about 95 per cent of its employees due to the suspension of services at its Melbourne and Perth resorts.

Gold stocks, which have supported the Aussie bourse's gains in recent sessions, also slid 1.6 per cent as profit-taking led to weaker bullion prices.

However, with corporate earnings expected to remain soft and a global recession looming, the drop in the prices of the safe-haven metal may be short-lived.

Across the Tasman Sea, New Zealand's benchmark S&P/NZX 50 index advanced for a third straight session and added 1.3 per cent.

The bourse climbed to its highest level since March 12.

REUTERS