Stock market investors are being warned to prepare for the Omicron-induced volatility, despite the local stock market posting a remarkable rally after an early plunge.
The Australian stock market entered a free fall moments after it opened, amid concerns over the new variant of Covid, but saw a remarkable recovery.
The local stock market fell 1.4 percent at the start of the session.
The benchmark S & P / ASX200 ended down 39.6 points or 0.54% to 7,239.7, while the All Ordinaries index lost 37.5 points from 0.49% to 7,562.4.
CommSec analyst Tom Piotrowski said there was great concern after the northern hemisphere markets fell on Friday.
“We saw the S & P500, for example, experience its worst decline since February and European markets post their worst performance since June,” Piotrowski said during intraday trading.
âOn the other hand, we saw a fairly constructive tone.
âWe’re actually seeing US futures consolidate in after-hours tradingâ¦ reasonable improvements under the circumstances. This has helped stabilize the Australian market.
It was an orderly sale, followed by consolidation, he said.
“It is the disorderly and erratic price movement that becomes of concern when markets struggle to bottom, and there is no evidence of that at this point,” Piotrowski said.
OMG Managing Director Ivan Churilov said sentiment has taken a serious hit since news of the Omicron variant started to spread, but the market has managed to achieve an incredible recovery after the first dive.
âMarkets will continue to change as news of the Omicron variant becomes available, so expect short-term volatility while the potential fallout is measured,â Churilov said.
âWhen it comes to volatility, Flight Center recorded one of the largest intraday price recoveries.
“Falling to $ 15.21, more than 11% below Friday’s close, the price came back to jump half a percent above.”
It then closed 0.88% lower at $ 16.99 after peaking at $ 17.44.
“It’s a massive intraday price range for blue chip stock,” Churilov said.
âFlight Center has been a favorite for retail investors looking to get their hands on Covid-sensitive businesses. “
Qantas slipped 2% to $ 4.90, Webjet fell 2.8% to $ 5.20, Corporate Travel Management fell 2.36% to $ 21.11 and Regional Express lost 2.83% at $ 1.37.
In the oil and gas sector, Woodside lost 1.67% to $ 21.24, Oil Search fell 2% to $ 3.91, Santos fell 1.54% to $ 6.39, and Beach Energy fell. declined 0.83% to $ 1.19.
“Oil was one of the hardest hit commodities: crude oil fell 12% and US oil fell 13%,” Churilov said.
âOur energy sector has cooled since October, which means today’s fallout was not too great.
âWhat we are seeing elsewhere are the price reversals of the past three months.
âBusinesses exposed to Covid have been sold off en masse, including travel and brick-and-mortar retailing.
âAlternatively, companies coming out of a Covid summit have seen their valuation increase.
“Domino’s Pizza and personal protective equipment supplier Ansell each jumped 5% to their respective highs today.”
Domino’s finished 4.09% stronger at $ 130.17 and Ansell strengthened 2.1% to $ 32.52.
Mr Piotrowski said the rise of the fast food giant was proof of the “stay-at-home theme”.
Scentre Group slipped 3.8% to $ 3.04, while fellow mall operator Stockland fell 2.03% to $ 4.35.
Department store chain Myer was flat at 50 cents after announcing it signed a binding agreement to refinance its existing credit facilities, which were due to be renewed in November next year, with a four-year asset-based loan. up to $ 215 million.
âWe have extended the life of our funding program, secured liquidity to invest in growth opportunities, including our online business, and maximized our financial flexibility,â said CFO Nigel Chadwick.
ANZ fell 1.66% to $ 26.62, Commonwealth Bank fell 1.09% to $ 93.78, National Australia Bank erased 1.63% to $ 27.20 and Westpac slipped from 0.76% to $ 20.92.
“The difference between short and long term interest rates has narrowed considerably, and that will work against their margins,” Piotrowski said.
Miners helped offset the losses, with Rio Tinto taking 0.99% to $ 95.39, BHP gaining 1.42% to $ 38.57 and Fortescue jumping 2.39% to $ 17.60, but Flinders Mines dipped 11.67% to 53 cents.
The tech sector was another winner, boosted by the surge in futures on the Nasdaq.
Technology One gained 3.11% to $ 11.92, Afterpay rose 1.34% to $ 110.55, Zip took 1.35% to $ 5.24 and Xero rose 1.37% to $ 141.21.
Sonic Healthcare gained 2.64% to $ 42.70.
“The prospect of more (Covid) testing is going to work in favor of this organization,” Piotrowski said.
In business news, the Australian Bureau of Statistics reported that corporate operating profits hit a record high of $ 463.1 billion in the 12 months to September 30, up 5.4% compared to the previous year.
According to the Australian Institute of Petroleum, the national average price of unleaded gasoline rose 4.2 cents last week to a record high of 170.4 cents per liter.
Ahead of Wednesday’s economic growth statistics for the September quarter, ABC economists estimated Australia’s gross domestic product to fall 3.5% – potentially the second largest quarterly decline since the records began. ABS in 1959.
The Australian dollar hit 71.34 US cents, 53.48 British pence and 63.23 euro cents in afternoon trading.