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Aussie stocks defy Wall Street bloodbath to open in the black

Business

Australia’s wild and unpredictable stock market has leapt more than one per cent as investors scrambled to snap up bank, supermarket and big mining stocks.

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In a small recovery following its worst-ever day, the benchmark S&P/ASX200 was up 53.5 points, or 1.07 per cent, at 5102 points at 1030 AEDT.

The broader All Ordinaries index was up 66 points, or 1.3 per cent, at 5,124.2 points as the materials, financials and consumer staples indices soared.

Investors had been bracing for another black day with the futures at 0700 AEDT pointing to a four per cent drop after US equities tanked overnight. The Dow Jones closed nearly 13 per cent lower.

CommSec analyst Steven Daghlian says trading is very volatile and unpredictable and will remain so until there is some certainty that the deadly coronavirus outbreak is waning.

“Even with some gains today, the market is down some 30 per cent in the last 17 days,” he said.

The ASX opened with a raft of profit warnings and trading updates.

Qantas has slashed 90 per cent of international flights and hauled back on domestic routes.

After half an hour of trading the carrier was down 4.3 per cent at $2.89.

Crown gained 0.55 per cent after it extended its social distancing plans for gamblers to the Perth casino.

Beverage bottler Coca-Cola Amatil and aged care provider Estia Health suspended earnings guidance amid coronavirus uncertainty.

Coca-Cola dropped 0.9 per cent to $9.93 while Estia retreated 3.91 per cent to $1.23.

Virgin Australia, Flight Centre and Cochlear have frozen outlooks as the virus sends global markets into a tailspin and wreaks havoc on supply chains.

Crude oil dropped nine per cent to 12 per cent overnight as analysts pushed back the time frame for economic recovery.

Santos said it was reviewing all its capital spending plans in light of the collapse in oil prices and will stop all new hiring.

Its shares gained 1.06 per cent to $3.81. At the same time Oil Search was flat at $2.79 and Origin Energy was flat at $5.29 as Woodside lifted 0.39 per cent to $18.03.

The big four banks were all up more than 1.5 per cent, with Commonwealth Bank gaining 2.31 per cent to $61.10.

Goldminers soared with Newcrest adding 5.53 per cent to $22.91 as Northern Star lifted 10.5 per cent to $10.15.

Australia’s benchmark S&P/ASX200 finished down 537.3 points, or 9.7 per cent, at 5,002 on Monday, eclipsing an 8.3 per cent drop on October 10, 2008, during the height of the global financial crisis.

The dive put the index back to levels last seen in April 2016.

The ASX200 has lost 30.5 per cent of its value in three-and-a-half weeks of tumultuous trading since February 20.

The Aussie dollar was buying 61.12 US cents at 10:30am AEDT on Tuesday, up from Monday’s 60.96 US cents, which was its lowest level against its US counterpart since 2003.

– AAP

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