Australia markets closed

ASX falls Thursday, as Australian unemployment hits 19-year high

Australian shares fell early Thursday. (Image: Getty)

Australian shares recovered some of its morning losses, but still finished Thursday’s trading down.

The ASX200 index ended 0.92 per cent lower at the close of trade to sink to 5,936.50 points, while the All Ordinaries finished 0.94 per cent down to rest at 6,051.90.

Investors had to navigate a dizzying day, first with overnight news of the resurgence of the Covid-19 in China and the US, then the morning revelation of Australia’s highest unemployment rate in 19 years.

What happened at lunchtime?

Australian stocks have plunged Thursday as a second wave of the coronavirus overseas and local unemployment numbers spooked the market.

The benchmark ASX200 index had dipped 1.61 per cent by 12:16pm AEST, to sink to 5,895.50 points.

The broader All Ordinaries also went 1.59 per cent lower in the same period to get to 6,012.20.

The Australian Bureau of Statistics revealed Thursday morning that Australia’s unemployment rate hit 7.1 per cent, which is the highest it has been for 21 years.

In the month of May, 85,700 people lost their jobs, which is the second highest loss on record – only eclipsed by April’s 594,300.

What happened this morning?

The Australian share market dipped in early trade Thursday morning, following an overnight tumble on Wall Street. 

The ASX200 index sunk 0.66 per cent in the first 14 minutes of trade to hit 5,952.50 points, while the All Ordinaries was 0.64 per cent lower in the same period to reach 6,069.80.

The descent comes after the Australian shares enjoyed a healthy jump in value over Tuesday and Wednesday.

Australian investors will be keeping an eye on May unemployment figures due out Thursday morning. Job losses are expected to be much smaller than the shocking April results. 

What happened overnight?

US stocks finished down overnight as investors digested news about the coronavirus' resurgence in China and some parts of the US.

The possibility of another wave of lockdowns sent shares tumbling, with the Dow Jones down 0.65 per cent and the S&P500 finishing 0.36 per cent lower. The exception was the tech-heavy Nasdaq index, which ended trade at 0.15 per cent up.

"It's a return of health concerns versus economic optimism," NovaPoint chief investment officer Joseph Sroka told AAP.

"There are periodic points of news flow where the positive news will carry the market and negative news will pressure the market… There's a tug of war with headlines."

The negative sentiment overseas sent the SPI200 futures 0.6 per cent lower at 8am AEST Thursday, pointing to losses in early trade in the Australian market.

with AAP

Follow Yahoo Finance Australia on Facebook, Twitter, Instagram and LinkedIn.