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Worst week for Aust shares since April

Steven Deare
·3-min read

Australia's share market has finished steeply lower on news US President Donald Trump tested positive for COVID-19 and a warning the resurgence of the virus overseas has grave implications for Aussie investors.

The S&P/ASX200 benchmark index finished down 81.4 points, or 1.39 per cent, to 5791.5 points on Friday.

The All Ordinaries index closed lower by 86.2 points, or 1.42 per cent, to 5983.2.

After a downbeat first few hours, the ASX200 looked as if it might finish even after Australia's decision to open its borders to New Zealanders encouraged investors to buy.

Then came Mr Trump's tweet confirming he and wife Melania were infected late in the afternoon.

The ASX200 lost about 50 points in the final hour of trade.

The US election was already a risk event for investors and Mr Trump's infection may cast uncertainty over whether the poll should be held on November 3.

The drop forced the ASX200 to a 2.91 per cent loss for the week, its worst week since April.

CMC Markets chief strategist Michael McCarthy said there was considerable pressure on the energy sector this week, and then commodities.

Copper prices tumbled overnight.

However, talk of reimposing virus restrictions in Madrid and New York, where infections are spreading, was Mr McCarthy's biggest concern.

"It's starting to hammer home the risk to investors," he said.

"They are starting to ask what more can central banks do."

He said if global investor sentiment fell, there was a big risk the ASX may fall from its range-trading patterns of the past few months.

All sectors finished lower in Friday's session. Energy had the greatest loss of 4.01 per cent.

Materials was next, down 2.13 per cent.

BHP dropped 3.22 per cent to $35.12, Rio Tinto shed 1.89 per cent to $93.60 and Fortescue lost 3.6 per cent to $16.08.

Retail sales for August were down four per cent on the previous month, which was better than economists' estimate of a 4.2 per cent decline.

Tight virus restrictions in Victoria were largely responsible for the drop.

In banking, ANZ lost 1.78 per cent to $17.08, the Commonwealth declined 0.5 per cent to $63.72, NAB sunk 1.91 per cent to $17.49 and Westpac fell 2.07 per cent to $16.57.

Travel companies had a mid-session fillip from the decision to allow Kiwis to visit NSW and the Northern Territory from October 16. Yet President Trump's tweet wiped away the gains.

Air New Zealand finished higher by 1.55 per cent to $1.31. Webjet was better by 0.51 per cent to $3.97.

Australian biotech Mesoblast plummeted after US health authorities declined to approve its therapy to treat a rare disease that affects blood cancer patients.

The US Food and Drug Administration asked the company for at least one more study showing its therapy, called remestemcel-L, can treat steroid-refractory acute graft versus host disease.

The decision caused shares to finish lower by 37.2 per cent to $3.19.

The Aussie market opened lower despite all three major US indices closing higher.

Investors had juggled hopeful and pessimistic news on the progress of economic stimulus talks.

The Aussie dollar was buying 71.63 US cents at 1717 AEST, lower from 71.93 US cents after the close of trade on Thursday.

ON THE ASX

* The S&P/ASX200 benchmark index finished down 81.4 points, or 1.39 per cent, to 5791.5 points on Friday.

* The All Ordinaries index closed lower by 86.2 points, or 1.42 per cent, to 5983.2.

* At 1717 AEST, the SPI200 futures index was higher by 12 points, or 0.21 per cent, to 5798.

CURRENCY SNAPSHOT

One Australian dollar buys:

* 71.63 US cents, from 71.94 US cents on Thursday

* 75.32 Japanese yen, from 75.86 yen

* 61.05 Euro cents, from 61.20 cents

* 55.63 British pence, from 55.60 pence

* 107.84 NZ cents, from 108.37 cents.