Australian Market Modestly Lower

The Australian stock market is modestly lower on Monday, extending the sharp losses in the previous session, with the benchmark S&P/ASX 200 staying above the 7,200 level, following the strongly negative cues from Wall Street on Friday, with steep losses in travel, energy and financial stocks amid fears the new coronavirus variant traced in South Africa.

The potential of more countries reinstating full lockdowns is sparking worries the pandemic could once again weigh down the global economy.

The market clawed back from early steep losses after the release of some upbeat corporate profits and business inventory data.

The benchmark S&P/ASX 200 Index is losing 29.10 points or 0.40 percent to 7,250.20, after hitting a low of 7,180.30 earlier. The broader All Ordinaries Index is down 29.70 points or 0.39 percent to 7,570.20. Australian stocks closed sharply lower on Friday.

Among the major miners, Rio Tinto is gaining almost 1 percent, Mineral Resources is adding almost 2 percent, Fortescue Metals is rising more than 2 percent and BHP Group is advancing more than 1 percent, while OZ Minerals is losing almost 2 percent.

Oil stocks are lower, with Woodside Petroleum and Origin Energy losing almost 2 percent each, while Oil Search and Santos are sliding more than 1 percent each. Beach energy is declining almost 1 percent.

Among tech stocks, WiseTech Global and Afterpay are gaining almost 2 percent each, while Xero is adding more than 2 percent and Appen is up more than 1 percent.

Gold miners are lower. Evolution Mining, Gold Road Resources and Resolute Mining are flat, while Newcrest Mining and Northern Star Resources are losing almost 1 percent each.

Among the big four banks, Commonwealth Bank and Westpac are losing more than 1 percent each, while ANZ Banking is declining more than 2 percent and National Australia Bank is down almost 2 percent.

Among travel stocks are plunging after warnings of border closures again from some countries, Flight Centre is losing more than 3 percent, Webjet is declining more than 4 percent, Qantas is slipping more than 2 percent and Corporate Travel Management is sliding almost 3 percent.

In economic news, Company inventories in Australia were down a seasonally adjusted 1.9 percent on quarter in the third quarter of 2021, the Australian Bureau of Statistics said on Monday. That missed expectations for a flat reading following the 0.2 percent increase in the previous three months. Company gross profits climbed 4.0 percent on quarter, beating forecasts for a gain of 3.0 percent and slowing from 7.1 percent in the three months prior. On a yearly basis, inventories rose 0.7 percent, while profits climbed 5.4 percent, wages gained 4.7 percent and wholesale sales perked 2.1 percent.

In the currency market, the Aussie dollar is trading at $0.714 on Monday.

On Wall Street, stocks showed a substantial move back to the downside during post-holiday trading on Friday after turning higher over the course of Wednesday's session. With the steep drop on the day, the major averages fell to their lowest closing levels in at least a month.

The major averages all finished the day sharply lower. The Dow tumbled 905.04 points or 2.5 percent to 34,899.34, the Nasdaq slumped 353.57 points or 2.2 percent to 15,491.66 and the S&P 500 sank 106.84 points or 2.3 percent to 4,594.63.

The major European markets also showed substantial moves to the downside on the day. While the French CAC 40 Index plunged 4.8 percent, the German DAX Index and the U.K.'s FTSE 100 Index plummeted by 4.2 percent and 3.6 percent, respectively.

Crude oil prices plummeted on Friday, sending the most active crude futures contract to their biggest single-session fall this year as reports of the new coronavirus variant raised concerns about the outlook for energy demand. West Texas Intermediate Crude oil futures for December ended down $10.24 or 13 percent at $68.15 a barrel, the biggest single-session loss since April 2020.

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