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Australia shares flat as dealers weigh coronavirus impact

Published 24/04/2020, 11:15 am
© Reuters.
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* Australian stocks down for week after 4 straight weekly gains

* Mesoblast soars as COVID-19 treatment shows promise

By Shashwat Awasthi

April 24 (Reuters) - Australian shares traded flat on Friday as investors held their bets while they fretted over the economic fallout from the novel coronavirus pandemic and worried that an antidote may not be imminent.

Dealers cheered data released overnight that showed a drop in weekly U.S. jobless claims, but U.S. markets recoiled following a report that an experimental antiviral drug for the coronavirus flopped in its first randomized clinical trial. .N

That tepid sentiment flowed into early Asian trading. The S&P/ASX 200 index .AXJO was unchanged at 5217.1 points by 0040 GMT and set to lose nearly 5% for the week after a four-week winning run.

Mesoblast MSB.AX outshone the index with a more than 21% surge to a two-month high, after the biotech company reported an 83% survival rate in ventilator-dependent COVID-19 patients treated with its cell therapy. prices extended their rebound from a historic crash earlier this week after major oil-producing nations said they would accelerate planned production cuts to combat a drastic slump in demand. O/R

That helped energy stocks .AXEJ , which have been the centre of attention this week, gain another 2% on the day.

After oil futures traded in negative territory for the first time ever this week, investors have been looking for hints that the impact from the outbreak will be overturned once major economies reopen for business.

Helima Croft, global head of commodity strategy at RBC Capital Markets, said a demand-led recovery in oil prices would come in the summer.

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"The gradual reopening of economies, in addition to the OPEC+ pledge to sideline a historic amount of crude, leads us to believe that the forward curve is drastically undervalued," Croft said.

Markets are also counting on central banks to do whatever it takes to tend to virus-induced economic bruises. That drove gold prices to a more than one-week high, and an index of Australian gold stocks .AXGD added 1.1%.

Across the Tasman sea, New Zealand's benchmark S&P/NZX 50 index .NZ50 rose 0.1% to 10,458.3.

Still, the bourse was set to fall for the week after four straight weeks of gains. It had posted a record weekly gain last week.

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