Shares on the Australian market are expected to be down in early trade after the US Federal Reserve chairman warned of extended economic weakness from the coronavirus pandemic.

The SPI 200 futures contract was down 58 points, or 1.07 per cent, to 5,366.0 at 0710 AEST on Wednesday, indicating a loss in early trade.

Chairman Jerome Powell pledged to use the US central bank’s power as needed, but called for Congress to agree on additional fiscal support.

Shawn Cruz, manager of trader strategy at TD Ameritrade in Jersey City, New Jersey, said: “He’s saying if you want to avoid a slow recovery and long-term economic damage you need a strong fiscal response, effectively placing that responsibility back over to governments instead of central banks”.

The Dow Jones Industrial Average fell 516.81 points, or 2.17 per cent, to 23,247.97, the S&P 500 lost 50.12 points, or 1.75 per cent, to 2,820 and the Nasdaq Composite dropped 139.38 points, or 1.55 per cent, to 8,863.17.

In Australia on Wednesday, the benchmark S&P/ASX200 index closed up 18.9 points, or 0.35 cent, at 5,421.9 points.

The All Ordinaries closed up 16.4 points, or 0.3 per cent, at 5,513.7 points.

One Australian dollar was buying 64.56 US cents at 0710 AEST, down from 64.79 US cents at the close of trade on Wednesday.

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