Aust shares drop on lockdown woes

The Australian share market was trading sharply lower at midday as global and local factors weighed on investor sentiment.

The benchmark S&P/ASX200 index was down 77.3 points, or 1.05 per cent, to 7270.80 at 1200 AEST.

The All Ordinaries was lower by 81.8 points, or 1.07 per cent, to 7548.90.

The declines were led by mining, energy and financial stocks with traders keen to book some profits due to growing uncertainty over the local COVID-19 outbreaks.

NSW has ordered a shutdown of all non-essential retail as well as construction sites in Sydney as infections show no signs of falling despite three weeks of lockdown. Neighbouring Victoria will also be extending a lockdown.

The decisions have sparked concerns about the hit to economic recovery, with some economists estimating negative GDP in the September quarter as a result.

Investor sentiment was also affected by a global selloff extending to Asian markets on Monday as economic growth begins to show signs of fatigue in many countries.

All three US indices had closed lower on Friday with major technology and financial companies among the big losers.

In the local market, material shares led the slide, with BHP, Rio Tinto and Fortescue Metals each trading more than 2 per cent lower. Gold and battery minerals were also among the losses, with Evolution Mining down 8 per cent at $4.29 and Pilbara Minerals losing 4 per cent to $1.51.

Energy stocks also took a hit after the group of oil exporting nations on Sunday agreed to boost production in a move expected to ease soaring oil prices.

Oil and gas majors Santos, Woodside Petroleum amd Oil Search were each trading between 2 per cent to 3 per cent lower.

Major banks also lost ground amid concerns over the economic impact of the extended lockdowns in Australia's two biggest cities. Shares in the Big Four banks, which have a significant exposure to the booming housing market, were rading between 1.5-2.0 per cent lower.

Meanwhile, the risk-sensitive Aussie dollar slipped to its lowest level since last December at 73.72 US cents. By 1200 AEST, it was buying 74.31 US cents at Friday's close.

Austrlaian Associated PressBack to Breaking News

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