ASX falls as virus blues weigh

·4-min read

Shares have eased to their worst performance of the week as Victorians prepare to join their NSW counterparts in coronavirus lockdown.

The ASX indices moved from little changed to lower as reports filtered through that the southern state would bunker down.

After the market closed, Victorian leaders confirmed a five-day lockdown after people from NSW spread the Delta variant.

Tribeca Investment Partners portfolio manager Jun Bei Liu had no doubt traders anticipated the decision and responded.

"It's certainly affected investor confidence," she said.

"You're seeing a lot of sectors impacted by the lockdowns being sold off more than others."

Travel shares bore the brunt of investor caution.

Corporate Travel Management shed 3.29 per cent to $20.57, Webjet lost 2.82 per cent to $4.83, and Flight Centre dipped by 2.58 per cent to $14.71.

The benchmark S&P/ASX200 index closed down 18.8 points, or 0.26 per cent, to 7335.9 on Thursday.

The All Ordinaries closed lower by 15.2 points, or 0.2 per cent, to 7616.6.

Healthcare shares fared worst and dropped 1.4 per cent, with market giant CSL declining by 1.67 per cent to $275.15.

The ASX fared little worse than US markets, which were little changed.

Federal Reserve Chair Jerome Powell said the US economy was "still a ways off" from levels the central bank wants to see before tapering its monetary support.

Mr Powell was speaking to US Congress after consumer price data for June showed the biggest increases in 13 years.

The Victoria and NSW lockdowns may make irrelevant the drop in Australia's unemployment rate to 4.9 per cent in June. It was the first time the rate has fallen below five per cent in more than a decade.

China confirmed its economic growth has slowed when it published second quarter gross domestic product figures.

Growth more than halved from a record expansion in the first three months of the year.

Slowing manufacturing activity, higher raw material costs and new COVID-19 outbreaks weighed.

However Ms Liu said China's decision last week to cut the amount of cash banks must hold in reserve was better news for investors.

"We will see improvement," she said.

"The consumer front has been pretty soggy and that's why they cut rates, hoping to stimulate the economy," she said.

"In the next six months, China will be quite supportive for commodities."

Fittingly, materials shares proved best on the ASX and rose 1.36 per cent with BlueScope Steel, Fortescue and Rio Tinto gaining more than two per cent.

The investors behind a spurned takeover of Sydney Airport say they are surprised and disappointed by the decision and claim the airport has challenging times ahead.

The Australian-led consortium of infrastructure investors took issue with the airport corporation's decision to reject a $22.3 billion takeover offer.

Airport leaders said the offer of $8.25 per stapled security was below the price traded before the pandemic struck last year.

Shares closed up 0.13 per cent to $7.81.

Spark Infrastructure, which has large stakes in electricity providers, has declined an offer for all its securities.

A consortium of pension funds offered $2.80 per security, which the Spark board rejected but it remains open to revised proposals.

Shares closed higher by 6.26 per cent to $2.63.

Buy now, pay later provider Sezzle has received a $40 million injection from US credit card provider Discover Financial Services.

Discover will buy the new shares for $8.38 each, and Sezzle will provide its services to Discover customers.

Sezzle shares were better by 5.15 per cent to $8.37.

The big four banks were all lower.

The Australian dollar was buying 74.65 US cents at 1729 AEST, higher from 74.59 US cents at Wednesday's close.


* The benchmark S&P/ASX200 index closed down 18.8 points, or 0.26 per cent, to 7335.9 on Thursday.

* The All Ordinaries closed lower by 15.2 points, or 0.2 per cent, to 7616.6.

* At 1729 AEST, the SPI200 futures index was down six points, or 0.08 per cent, to 7237.


One Australian dollar buys:

* 74.65 US cents, from 74.59 cents on Wednesday

* 81.94 Japanese yen, from 82.39 yen

* 63.10 Euro cents, from 63.25 cents

* 54.00 British pence, from 53.88 pence

* 106.48 NZ cents, from 106.30 cents.

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