As it happened: ASX plummets as Trump tests positive for COVID-19

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As it happened: ASX plummets as Trump tests positive for COVID-19

Summary

  • The ASX200 plunged on news US President Donald Trump and his wife Melania have tested positive for the coronavirus. The local benchmark finished 1.4% lower on Friday
  • The market dropped 50 points in seven minutes in the wake of the news, falling as low as 5786. US futures plummeted 1.7% and point to heavy losses on Wall Street
  • The Aussie dollar dipped from 71.60 US cents to 71.33 US cents and was 71.62 US cents at 5.30pm AEST
  • The local market had been buoyed by news New Zealanders from low-risk COVID-19 areas will be able to travel to NSW and the Northern Territory from October 16 without needing to quarantine 
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Markets wrap: Trump COVID diagnosis sends investors fleeing

By Alex Druce

The Australian sharemarket plunged in the final hour of trade on news President Donald Trump and his wife Melania had contracted the coronavirus a month out from the US election.

The market dropped 50 points in seven minutes following the news and finished 81.4 points, or 1.4 per cent lower at 5791.5 - the lowest close in more than a week and also the market's worst weekly loss since April.

The fall mirrored nosediving US futures markets, which were down 1.7 per cent at the local close and pointing to heavy losses for Wall Street traders in Friday’s week-ending session.

A late-night tweet from the President confirmed the COVID-19 diagnosis after one of his closest aides, Hope Hicks, earlier tested positive and forced Trump into quarantine.

The development sparked a sharp, late selloff in local trade as investors moved to de-risk.

Local markets were already subdued when the President’s news came through, though had shown signs of improvement on news of a travel bubble being created with New Zealand.

The relaxed - albeit one-way - restrictions from October 16 will allow New Zealanders from non-hotspots to visit NSW and the Northern Territory. The news boosted travel-adjacent firms including Qantas, Air New Zealand, both Sydney and Auckland airports, and travel agencies Flight Centre, Webjet, Corporate Travel and Helloworld.

All ASX sectors ultimately ended in the red with the struggling energy sector faring the worst in a 4 per cent dive. Gold and silver prices ticked higher as their safe-haven appeal rose.

Meanwhile, the Aussie dollar dipped from 71.60 US cents to 71.33 US cents in the wake of the news, but edged back to 71.55 US cents after the close.

Tribeca portfolio manager Jun-Bei Liu said the Trump development was yet another layer of uncertainty in an extremely volatile period for US politics.

“People just have so many questions,” she said. “Can Trump campaign? Does the election get delayed? What about Biden? They were in the room for two hours together (at the presidential debate) so does he have it?”

“I think ultimately we’ll find a way through. On Monday we’ll see more reaction to the news but then people will step back and look at the underlying fundamentals.”

JPMorgan Asset management global markets analyst Kerry Craig said news of Trump’s illness ultimately dominated the day but he added that Friday’s fall could have been worse as several Asian markets are on holiday. The week-ending session is also a typically quieter day for volume.

“It was pretty close to the end of the day so a little hard for it to have too much of an impact… I think we’re going to see a lot more movement when US markets open,” Mr Craig said.

“The story for us is how we react on Monday after we see what happens in the US and Europe.”

“There’s still a wide range of outcomes that could happen from here. We just don’t know. I would say that it doesn’t necessarily mean a sustained selloff."

The major banks and miners were depressed throughout the day in local trade while biotech CSL also sagged.

Stem cell firm Mesoblast was easily the market laggard, shedding more than $1 billion in value in a 37 per cent dive to $3.19 on a regulatory setback in the US.

The US Food and Drug Administration has demanded further evidence of the effectiveness of the firm’s flagship remestemcel-L treatment before granting approval.

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Good night all

A dramatic late flourish caps off another volatile week for the ASX200.

No doubt there's still plenty to be written about President Trump's coronavirus diagnosis, and the potential ramifications that follow.

Thanks for reading along with us today. Alex Druce will be back on Monday with the returning Lucy Battersby.

Until then, stay safe.

Markets wrap: Trump COVID diagnosis sends investors fleeing

By Alex Druce

The Australian sharemarket plunged in the final hour of trade on news President Donald Trump and his wife Melania had contracted the coronavirus a month out from the US election.

The market dropped 50 points in seven minutes following the news and finished 81.4 points, or 1.4 per cent lower at 5791.5 - the lowest close in more than a week and also the market's worst weekly loss since April.

The fall mirrored nosediving US futures markets, which were down 1.7 per cent at the local close and pointing to heavy losses for Wall Street traders in Friday’s week-ending session.

A late-night tweet from the President confirmed the COVID-19 diagnosis after one of his closest aides, Hope Hicks, earlier tested positive and forced Trump into quarantine.

The development sparked a sharp, late selloff in local trade as investors moved to de-risk.

Local markets were already subdued when the President’s news came through, though had shown signs of improvement on news of a travel bubble being created with New Zealand.

The relaxed - albeit one-way - restrictions from October 16 will allow New Zealanders from non-hotspots to visit NSW and the Northern Territory. The news boosted travel-adjacent firms including Qantas, Air New Zealand, both Sydney and Auckland airports, and travel agencies Flight Centre, Webjet, Corporate Travel and Helloworld.

All ASX sectors ultimately ended in the red with the struggling energy sector faring the worst in a 4 per cent dive. Gold and silver prices ticked higher as their safe-haven appeal rose.

Meanwhile, the Aussie dollar dipped from 71.60 US cents to 71.33 US cents in the wake of the news, but edged back to 71.55 US cents after the close.

Tribeca portfolio manager Jun-Bei Liu said the Trump development was yet another layer of uncertainty in an extremely volatile period for US politics.

“People just have so many questions,” she said. “Can Trump campaign? Does the election get delayed? What about Biden? They were in the room for two hours together (at the presidential debate) so does he have it?”

“I think ultimately we’ll find a way through. On Monday we’ll see more reaction to the news but then people will step back and look at the underlying fundamentals.”

JPMorgan Asset management global markets analyst Kerry Craig said news of Trump’s illness ultimately dominated the day but he added that Friday’s fall could have been worse as several Asian markets are on holiday. The week-ending session is also a typically quieter day for volume.

“It was pretty close to the end of the day so a little hard for it to have too much of an impact… I think we’re going to see a lot more movement when US markets open,” Mr Craig said.

“The story for us is how we react on Monday after we see what happens in the US and Europe.”

“There’s still a wide range of outcomes that could happen from here. We just don’t know. I would say that it doesn’t necessarily mean a sustained selloff."

The major banks and miners were depressed throughout the day in local trade while biotech CSL also sagged.

Stem cell firm Mesoblast was easily the market laggard, shedding more than $1 billion in value in a 37 per cent dive to $3.19 on a regulatory setback in the US.

The US Food and Drug Administration has demanded further evidence of the effectiveness of the firm’s flagship remestemcel-L treatment before granting approval.

Trump's COVID-19 drama knocks ASX down 1.4%

By Alex Druce

The ASX200 plunged in the final hour of trade on news US President Donald Trump and his wife Melania contracted the coronavirus.

The market dropped 50 points in seven minutes and finished 81.4 points, or 1.4 per cent lower at 5791.5 following the news - the lowest close in more than a week. The fall mirrored a nosedive in US futures markets, which were down 1.7 per cent at 4pm AEST.

The best ASX200 performers on Friday were:

  • Janus Henderson +9.4% at $32.80
  • EML Payments +3% at $3.05
  • Fletcher Building +1.7% at $3.66
  • TechnologyOne +1.5% at $8.01
  • Domino's Pizza +1.3% at $80.60

The worst performers on Friday were:

  • Mesoblast -37.2% at $3.19
  • NRW Holdings -8.1% at $1.88
  • Beach Energy -6.4% at $1.25
  • Oz Minerals -6.3% at $13.38
  • Oil Search -6% at $2.52
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President Trump tests positive for COVID-19, markets dive

By Alex Druce and Matthew Knott

Markets have taken a dive on news US President Donald Trump and wife Melania have tested positive for coronavirus just one month out from the November 3 presidential election.

US futures plummeted in response to the tweet and are down 1.7 per cent at 3.40pm AEST, pointing to heavy early losses on Wall Street.

The local market dropped 50 points in seven minutes and fell as low as 5788.8 on the news - its lowest in more than a week. The market was down 1.5 per cent down at 3.45pm.

The Aussie dollar dipped from 71.60 US cents to 71.33 US cents in the wake of the news.

Earlier it was reported the pair had gone into self-quarantine at the White House after one of his closest aides, Hope Hicks, tested positive for coronavirus.

Trump has previously not gone into quarantine when other White House staff have contracted COVID-19, raising questions about his initial test results.

ANZ cops $10m fine for 'unconscionable conduct'

By Charlotte Grieve

The big four bank ANZ has been fined $10 million after the Federal Court found it had engaged in unconscionable conduct and breached its obligations as a financial services licensee.

The Australian Securities and Investments Commissioned found ANZ had charged fees to personal and business accounts that it was not entitled to between 2003 and 2015. The bank admitted that in 2011, external lawyers had warned ANZ there was a risk it was breaking the law but continued the practice regardless.

ANZ head office in Docklands Melbourne

ANZ head office in Docklands MelbourneCredit: Pat Scala

The court also found ANZ had engaged in further breaches of the law after it failed to make remediation payments to affected customers in 2013.

ASIC's deputy chair Daniel Crennan said the $10 million penalty sent a "strong deterrent" message to banks.

"ASIC, through its Office of Enforcement, has held ANZ to account for this conduct," Mr Crennan said.

NZ holiday bubble lifts airports, airlines, travel agents

By Alex Druce and Mary Ward

News that New Zealand visitors could soon be touching down in Australia boosted swathe of ASX-listed travel stocks.

The federal government announced this afternoon that New Zealanders who have not been in a coronavirus hotspot area for 14 days will be allowed to travel to NSW and the Northern Territory from October 16. The arrangement is not currently reciprocal but it is Australia's intention for it to become a two-way arrangement when this is allowed by New Zealand.

Travel-aligned firms have been among the hardest hit during the COVID-19 pandemic as travel bans, lockdowns and quarantine measures keep customers at home. Firms have been forced to slash staff, withhold shareholder payouts, and raise funds just to stay afloat.

That changed at lunchtime, when the news started filtering through.

By 2.30pm AEST on Friday, Flight Centre was 1.8 per cent higher on the news amid a 0.5 per cent decline for the wider market.

Fellow travel agents Webjet jumped 4.1 per cent, Corporate Travel 1.2 per cent, and Helloworld Travel 7.2 per cent

Sydney Airport rose 0.9 per cent and Auckland International Airport was up 2.2 per cent.

Qantas leapt 2.9 per cent and Air New Zealand was 7 per cent higher.

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'The fish are biting and the beers are cold': NT and NSW will open to NZ

By Angus Livingston and Mary Ward

New Zealanders will be able to travel to NSW and the Northern Territory without needing to quarantine in a one-way travel bubble from October 16.

The travellers will need to have been in an area of New Zealand with low numbers of COVID-19 cases for at least 14 days before they will be allowed into Australia.

Deputy Prime Minister Michael McCormack says New Zealanders will be allowed to fly to NSW and the NT from October 16 without quarantining.

Deputy Prime Minister Michael McCormack says New Zealanders will be allowed to fly to NSW and the NT from October 16 without quarantining.Credit: Dominic Lorrimer

Deputy Prime Minister Michael McCormack thanked NSW Premier Gladys Berejiklian and NT Chief Minister Michael Gunner for opening up to Kiwi tourists.

"I have just gotten off the phone with Chief Minister Gunner who says 'the fish are biting and the beers are cold' and he wants to see as many of his New Zealand cousins and friends as possible," he said.

The first step of the arrangement will see New Zealanders able to fly to NSW and the Northern Territory, provided they have not been in a "hotspot" area, defined as a place which has seen three days of less than three cases.

Mr McCormack said any state or territory that agrees to the Commonwealth's hotspot definition will be allowed to enter a trans-Tasman travel bubble with New Zealand. He expects South Australia could be the next state to sign up to the plan.

Full story here

ASX lower, heading for worst week in four

By Alex Druce

The Australian sharemarket is heading for its worst week in at least four as the index heavyweights continue drag.

The benchmark ASX200 was down 0.6 per cent at 5836.7 at 1.40pm AEST having earlier fallen by as much as 1.2 per cent. The weekly decline so far is 2.1 per cent.

The index improved slightly following news New Zealanders will be able to travel to NSW and the Northern Territory without needing to quarantine in a one-way travel bubble from October 16.

The big banks, miners, and biotech CSL were all lower, as were fellow blue-chips Woolworths, Transurban, Telstra, and ResMed.

Energy stocks sagged a collective 2.3 per cent on an overnight oil price plunge, while stem cell firm Mesoblast was 33 per cent lower at $3.38

Retail conglomerate Wesfarmers was defiant with a 0.5 per cent rise to $44.79 and warehousing, industrial, and office firm Goodman Group rose 0.8 per cent to $18.20.

Tech stocks were buoyant, with Afterpay up 2.9 per cent at a near four-week high of $82.79 and Xero hitting a new intraday record high of $104.94. Xero was last 1.7 per cent higher at $104.18.

US futures are down 0.3 per cent.

Struggling Funtastic flags potential acquisition

By Dominic Powell

Former Myer boss Bernie Brooke’s struggling toy wholesaler Funtastic has confirmed it is in the midst of negotiating a potential acquisition after placing its shares into a trading halt yesterday.

In a message to shareholders, Funtastic said it was progressing well with talks over a potential merger, however, no agreement between the two parties had been entered into and there would be “no guarantee” that the deal would go ahead.

Funtastic chairman Bernie Brookes.

Funtastic chairman Bernie Brookes. Credit: Paul Jeffers

The update follows an article in the Australian Financial Review which claimed Funtastic was merging with toy retailer Hobby Warehouse, which owns the licensing rights for Toys’R’Us in Australia.

Funtastic did not specify what company was the target of its potential acquisition and said it would update the market in due course.

The retailer recently reported a $9.2 million loss for the 2020 financial year and is currently having its full-year accounts audited to assess if the business is able to continue as a going concern.

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Breville brews up $US60m deal for coffee grinder Baratza

By Dominic Powell

Appliance manufacturer and retailer Breville has acquired US coffee grinding company Baratza for $US60 million ($83 million) in an effort to bolster its coffee division.

Announced today, Breville told investors it had acquired 100 per cent of the business on a cash and debt-free basis.

Breville has bought US coffee grinding firm Baratza for $US60 million.

Breville has bought US coffee grinding firm Baratza for $US60 million. Credit: Louie Douvis

A total of $US43 million was paid from Breville’s existing cash reserves and the remaining $US17 million was paid by the issuance of 884,956 Breville shares. Baratza was founded in 1999 and designs and markets high-end coffee grinders in the US and international markets.

“We are excited by the opportunity to bring Baratza into the Breville family. Our combined experience will unlock dynamic revenue synergies for both businesses, that share a passion for innovation and an unwavering commitment to enhancing the consumer experience,” Breville chief executive Jim Clayton said.

“As a business renowned for its excellence in leading-edge design and customer service, it is vital to us that we maintain our unique culture and global brand. In Breville Group, we are confident we have found a partner with shared values and deep category expertise, whose vision for the future complements our own,” Baratza chief Kyra Kennedy said.

Breville shares fell 2 per cent after market open but are currently up 0.8 per cent at $26.10.

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