Australian shares have dropped to a two-month low amid concerns the rapid spread of COVID-19 in China would further hurt economic growth and affect global supply chains in the short-term.
In other news, property prices dropped 5.3 per cent last year, its steepest decline since the global financial crisis in 2008.
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ASX closes 1.3% lower as markets weigh China risks
By David Chau
Australian shares ended their first trading day of 2023 with a fairly significant loss.
The ASX 200 was down 1.3 per cent to 6,946 points, its lowest level in almost two months.
By 4:50pm AEDT, the Australian dollar had slipped 0.2% (to trade at 67.9 US cents).
Investors were cautious as they weighed the near-term costs of the COVID-19 infections in China against the longer-term benefits of a complete reopening of the world's second-largest economy.
About eight out of every 10 stocks traded lower.
Mining stocks were some the worst performers, including New Hope (-8.5%), Whitehaven Coal (-6.3%), Coronado Global (-4.8%).
Uranium stock Paladin Energy (-5.7%), along with lithium companies Liontown Resources (-7.2%) and Lake Resources (-5.6%) also posted sharp losses.
On the flip side, some of the best performers were gambling stocks Tabcorp (+2.8%) and Star Entertainment (+2.5%), and gold companies including Evolution Mining (+2%) and Gold Road Resources (+2.4%).
House prices facing one of the 'steepest downturns' on record
By David Chau
CoreLogic's head of Australian research, Eliza Owen, expects property prices will keep falling throughout the first-half of 2023.
How much they fall depends on how much further the Reserve Bank (RBA) lifts interest rates this year.
The median property price has already dropped 8.2 per cent since peaking in May 2022.
"It's definitely on track to be one of the steepest downturns that we've seen on record," Ms Owen told finance reporter Sue Lannin, on the ABC News Channel.
The so-called 'mortgage cliff' may also contribute to the fall in house prices.
"According to RBA analysis, about 23 per cent of oustanding mortgage debt is on fixed terms that will expire over 2023."
Many borrowers who signed up to fixed mortgage rates of 2 per cent (or less) at the height of the pandemic will see their repayments shoot above 5 or 6 per cent (on average).
You can watch the full interview here:
ASX losses deepen to 1.7%
By David Chau
Australian shares hasve dropped even further in afternoon trade, hitting a fresh two-month low.
Here's a snapshot of where the market was sitting around 12:30pm AEDT:
- ASX 200 : 6,917 points (+1.7%)
- Asian markets : Hang Seng (-1.1%), Shanghai Composite (-0.1%)
- Australian dollar : 67.8 US cents (+0.3%)
- Gold : $US1,827 an ounce (+0.2%)
- Brent crude oil : $US85.03 a barrel (-1%)
Surveys out over the weekend showed China's factory activity had shrunk at the sharpest pace in nearly three years as coronavirus infections swept through production lines.
"China is entering the most dangerous weeks of the pandemic," warned analysts at Capital Economics.
"The authorities are making almost no efforts now to slow the spread of infections and, with the migration ahead of Lunar New Year getting started, any parts of the country not currently in a major COVID wave will be soon."
Chinese EVs launch in Australia
By David Chau
Australia is lagging behind other nations, when it comes to the uptake of electric vehicles. High prices and limited charging facilities have been blamed for this.
Meanwhile, China has become the world's largest EV market.
It's estimated that 100 billion yuan ($14.8 billion) in subsidies, free registration, tax exemptions and cash rebates were handed out to EV buyers in China by the end of 2021.
This story, by Samuel Yang and Dong Xing, explains how China become the world's largest manufacturer of electric cars.
ASX wipes out gains from past two months
By David Chau
Losses on the share market have accelerated, as investor sentiment turned sour.
The ASX 200 was down 1.4% to 6,942 points, by 11:30am AEDT.
Essentially, the market has fallen to its lowest level since November 7 (or a two-month low, in other words).
The major banks and miners weighed were the biggest drags on the market, including Commonwealth Bank (-1.7%), Westpac (-1.8%), NAB (-2.2%), BHP (-0.9%), Rio Tinto (-1.5%) and Fortescue Metals (-1.5%).
Gold and gambling stocks in the lead
By David Chau
Only 36 stocks in the benchmark index (the ASX 200) have risen today — so that's not many of them.
Many of the best performers are gold stocks, like De Grey Mining (+2.7%), Regis Resources (+1.2%), Evolution Mining (+1.2%).
Gambling stocks have also posted solid gains, including Tabcorp (+2.8%) and Star Entertainment (+1.1%).
Coal and lithium stocks fall sharply
By David Chau
Here are the stocks on the ASX 200 which have suffered the biggest falls this morning.
The worst performers are mainly coal mining companies, like New Hope (-6%), Whitehaven Coal (-4.3%) and Coronado Global Resources (-2.5%).
Lithium and battery stocks also experienced a hefty decline, including Novonix (-4.4%) and Liontown Resources (-5.3%).
ASX falls 0.7% in morning trade
By David Chau
The Australian share market has begun its day unexpectedly lower, with the ASX 200 losing 0.7% to 6,990 points (by 10:50am AEDT).
That was despite a strong performance across European markets overnight, and the futures market pointing to a solid start for the ASX.
Materials and real estate are the best performing sectors so far.
On the flip side, the healthcare, utilties and technology are the worst performing sectors.
Property prices suffer biggest drop since GFC
By David Chau
2022 was not a great year for Australian house prices (from an owner's perspective at least).
The nation's median value fell 5.3% last year — the biggest annual drop since the financial crisis in 2008, according to property analysis firm CoreLogic.
The biggest falls were seen in Sydney (-12.1%) and Melbourne (-8.1%), followed by Hobart (-6.9%), Canberra (- 3.3%), and Brisbane (-1.1%).
However, three capital cities saw price increases over the year: Adelaide (+10.1%), Darwin (+4.3%), and Perth (+3.6%). However, prices have been starting to fall in those smaller cities in recent months.
CoreLogic’s research director, Tim Lawless, said national home values peaked on May 7 (shortly after the Reserve Bank began its aggressive rate-hiking cycle).
"Since then, CoreLogic’s national index has fallen 8.2%, following a dramatic 28.9% rise in values through the upswing," he added.
For more on this (and how various suburbs performed), here's a detailed breakdown from reporter Shiloh Payne.
ASX set to lift on first trading day of New Year
By David Chau
Good morning! David Chau from the ABC business team here, bringing you the latest market news.
The local share market is set to begin its day higher, following solid gains on European markets overnight.
It's also likely to be an improvement over the downbeat end to 2022.
The ASX 200 fell 5.5%, while the broader All Ordinaries index dropped 7.2% over the past year (which was just a few days ago)! This marks their biggest annual loss since 2018.
But they still did a lot better than US markets — the Dow Jones fell 8.8%, while the S&P 500 lost 19.4% and the Nasdaq Composite plummeted 33.1%.
It was the worst yearly performance for Wall Street since the global financial crisis, back in 2008.
Anyway, this is how markets are looking today (at 9:25am AEST):
- ASX SPI futures are up 0.5%, to 6,922 points
- The Australian dollar is buying 68 US cents (down 0.3%)
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Spot gold is steady at $US1,823.69 an ounce
- Brent crude oil gained 2.9%, to $US85.91 a barrel (when it last traded, on Friday)
- Iron ore
- European markets: DAX (+1.1%), CAC (+1.9%), Stoxx 600 (+1%)
US and British stock exchanges were closed on Monday (local time), as traders are enjoying the News Years public holiday there.
