ASX 200 weekly: Coronavirus drags on travel stocks Virgin and Qantas

The pandemic of respiratory virus COVID-19 continued to wreak havoc on international share markets last week. In Australia, the value of the top 200 shares fell another 3.45%.

Travel stocks such as Virgin and Qantas were hit particularly hard last week, as were the Commonwealth Bank, the National Australia Bank (NAB) and ANZ.

The ASX 200 index on 9 March, 2020. Source: Google

Coronavirus’ global spread likely to continue impacting markets

More falls on the US markets were expected to contribute to the local Australian Securities Exchange (ASX) having a lower opening today. It opened more than 7% down, the ASX 200 reaching below 6,000 points at 10:10am today AEDT .

After the almost 10% plunge in the ASX 200 in the first week of the month, there was another decline of 3.28% across the wider market last week.

The Reserve Bank of Australia pulled the trigger on a 0.25 percentage point cut to the cash rate last Tuesday. The official interest rate is now at an unprecedented 0.5%.

With strong urgings from the Prime Minister and other leaders, the big four banks and a number of other lenders passed on the full cash rate cut to their home loan customers.

There are also high-level discussions about forgoing the planned Budget surplus for a multi-billion dollar stimulus package, aimed at shielding the economy and workers from further coronavirus-related pressures.

Tomorrow, NAB will release its monthly business confidence figures. These are expected to be as much as two points lower than the bank’s January numbers, amidst growing economic uncertainty due to factors such as the coronavirus.

S&P and All Ords Movements (28/02/2020 to 06/03/2020)
Closing Points % Change
S&P/ASX 200 (XJO) 6,216 -3.45%
All Ordinaries (XAO) 6,288 -3.28%
Prepared by Canstar. Points taken as of Monday open to Friday close.

Big banks dive amid widespread falls across all sectors

Given the ongoing scale of the stock market falls, many sectors were affected last week, but none more so than the banks.

The big four suffered significantly, reflected in an 8.58% fall in the overall financial sector.

NAB – a more business-lending focused bank than its big four rivals – last week hit its lowest price since 2012 and ended the week at $22 per share, a double-digit decline for the week and its lowest price in more than eight years.

Australia’s biggest home loan lender – and biggest company by market capitalisation – the Commonwealth Bank of Australia (CBA) also suffered serious losses of 9.6% to shed almost $13 billion in overall value. Its share price ended Friday at $73.93 – far from its 52-week high of $91.05.

Rounding out the big four, Westpac (WBC) and ANZ also fell 9.7% and 10.8% respectively.

Blue-chip miner BHP also fell 4.2%, amid global concerns over worldwide productivity.

And travel companies were punished. National carrier Qantas (QAN) announced it would cut capacity to some Asian destinations and its price fell 8% on the news.

Virgin Australia (VAH) plummeted 17% on Friday, having more than halved in value over the last 12 months.

 

ASX 200 – Top 5 Market Capitalisation Losses (28/02/2020 to 06/03/2020)
Rank Company $ Change in Market Cap Closing Share Price % Change in Share Price
1 Commonwealth Bank -$13,896,380,129 $73.93 -9.6%
2 National Aust. Bank -$9,100,533,880 $22.00 -12.4%
3 Westpac Banking Corp -$8,270,758,352 $21.35 -9.7%
4 ANZ Banking Group Ltd -$7,629,317,265 $22.14 -10.8%
5 BHP Group Ltd -$4,153,650,465 $32.19 -4.2%
Prepared by Canstar. Prices taken as of week to week close.

A toilet paper-led recovery for consumer staples like Coles?

Some stocks gained amid the COVID-19 turmoil, as investors priced in the potential for home-based quarantine and working scenarios.

Consumer staples rose 1.19% overall – Coles was up a significant 10.5% to $15.70.

There was also optimism for health care companies, where share prices rose 1.2% as an index.

Vaccine-maker CSL led the way among the big-caps, gaining 1.7% to $314.59 a share. Sonic Healthcare also gained 6.9% to $30.78 after a strong half-year result and a broker upgrade.

The value of telecommunications companies also rose, by 2.08%, including national provider Telstra (TLS), which was up 3.5%.

Gold miner Newcrest Mining also gained, along with some other defensive shares, to end the week up 10.6% at $29.08.

 

ASX 200 – Top 5 Market Capitalisation Gains (28/02/2020 to 06/03/2020)
Rank Company $ Change in Market Cap Closing Share Price % Change in Share Price
1 CSL Ltd $2,337,494,293 $314.59 1.7%
2 Newcrest Mining $2,137,384,135 $29.08 10.6%
3 Coles Group $1,987,555,247 $15.70 10.5%
4 Telstra Corporation $1,427,195,742 $3.55 3.5%
5 Sonic Healthcare $940,608,733 $30.78 6.9%
Prepared by Canstar. Prices taken as of week to week close.

Were there any standout gains last week?

Amid the turbulence, there were some significant jumps in stock prices over the week.

After announcing a solid half-year result at the end of February, New Zealand-based telecommunications company Chorus Limited (CNU) gained 15.2% to end the week at $7.36.

It was joined by a few other telcos, including Telstra (as mentioned above) and TPG Telecom Ltd (TPM), which was up 10.9% to $8.35 after the ACCC decided not to appeal the Federal Court’s decision to allow its merger with Vodafone.

Gold miners Saracen Mineral (SAR) and Newcrest Mining (NCM) also notched up double-digit gains. Gold is often considered a “safe haven” investment in times of economic turbulence.

And rural property and agribusiness company Elders Ltd (ELD) also increased in value 13.8% to $8.81. There was no major news from the company, although it has gained value steadily since the start of the year, when several farming regions of Australia experienced long-awaited rain.

ASX 200 – Top 5 Share Price Gains (28/02/2020 to 06/03/2020)
Rank Company Closing Share Price % Change
1 Chorus Ltd Foreign Exempt NZX $7.36 15.2%
2 Elders Ltd $8.81 13.8%
3 Saracen Mineral $4.29 13.8%
4 TPG Telecom Ltd $8.35 10.9%
5 Newcrest Mining $29.08 10.6%
Prepared by Canstar. Prices taken as of week to week close.

And there were dramatic falls from COVID-19-exposed stocks

Business travel agent Corporate Traveller (CTD) lost 22.5% to slump to $10.80 and Flight Centre fell 18.8% to $26.50, amid reports some companies were ordering their staff to work from home and cancelling international travel.

Wealth managers HUB24 Ltd (HUB) and Pinnacle Investment (PNI) were also punished to the tune of 20.5% and 17.2% respectively. These corrections follow strong gains over recent years, however.

And education provider G8 Education (GEM) lost 18.5% to end the week at $1.33, amid concerns over impacts on the international education sector due to COVID-19.

ASX 200 – Top 5 Share Price Losses (28/02/2020 to 06/03/2020)
Rank Company Closing Share Price % Change
1 Corp Travel Ltd $10.80 -22.5%
2 HUB24 Ltd $7.99 -20.5%
3 Flight Centre Travel $26.50 -18.8%
4 G8 Education Ltd $1.33 -18.5%
5 Pinnacle Investment $4.33 -17.2%
Prepared by Canstar. Prices taken as of week to week close.

 

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