Aussie market remains ‘sensitive’ to virus


The Australian share market could see a gain of 0.9 per cent at the start of trading on Monday, but the continuing volatility of the coronavirus pandemic means the market might not finish up that way.

CommSec chief economist Craig James said the United States market and the expected raft of news about COVID-19 on Monday would influence the Australian market.

“Our market will be sensitive to that news,” he told AAP on Sunday.

The latest employment figures in the US had been expected to show a fall of 100,000 but it was actually a massive 701,000.

“It didn’t overly spook markets, but it put a downward pressure on the markets,” Mr James said.

“The markets continue to brace for bad news. Investors are conditioned to expect bad news.”

The US market finished lower, with the Dow Jones down 1.7 per cent, while NASDAQ and S&P 500 were both down 1.5 per cent.

One Australian dollar was buying 59.95 US cents on Saturday, down from 60.7 US cents on Friday.

“The lower Australian dollar is good news for our exporters,” Mr James said.

Meanwhile, the oil price continues to rise, experiencing a record daily gain, which provided a boost for the energy sector.

Gold was up $8 per ounce, which Mr James said should be a positive for gold shares.

Iron ore was down 85 cents per tonne, or one per cent.

Mr James said while the world was still focused on coronavirus and waiting for a vaccine, there had been some encouraging news, with more companies getting on board and more testing.

“It’s all about how long this is going to take for stabilisation … how quickly the curve can flatten,” he said.

The Reserve Bank of Australia will meet on Tuesday and Mr James said there could be an announcement of new measures.

But he said it was likely the cash rate would remain at 0.25 per cent.

“We’ll just have to wait and see,” he said.

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