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ASX 200 dips and then rebounds in wild start to week

ASX 200
Credit: Cimexus

The ASX 200 (INDEXASX: XJO) was very volatile today because of the coronavirus.

It started today with another fall of almost 3%. But by the end of the day the ASX 200 only finished down by 0.8%, meaning it recovered by around 2% between midday and the close of trade.

Why was the ASX so volatile today?

The coronavirus spread further over the weekend with deaths in Australia and the US. Italy continued to see cases rise, the Louvre in Paris closed, the news keeps coming. But investors are looking to the Reserve Bank of Australia (RBA) to save the week with a rate cut tomorrow and perhaps the US Fed will cut too.

The ASX still ended in the red, but the rout has at least been slowed to a ‘normal’ decline of less than 1%, rather than another shocker.

Property prices rose again

Nationally, in February house prices grew by another 1.1%. Sydney house prices went up 1.7% and Melbourne house prices grew 1.2%.

Melbourne, Brisbane, Adelaide, Hobart and Canberra are now at their all-time high prices. However, Sydney is still 3.7% below its all-time high whilst Perth and Darwin are 21% and 32.7% lower than their peak prices.

Property businesses still saw red because of the market decline, but some of them perked up after the CoreLogic numbers were released.

The REA Group Limited (ASX: REA) share price finished 1.4% lower and the Domain Holdings Australia Ltd (ASX: DHG) share price declined 2.8%, but the Mcgrath Ltd (ASX: MEA) share price ended flat – which is fairly good on a day like today.

Mixed returns

It still was a rough day for some resource businesses like Fortescue Metals Group Limited (ASX: FMG) which dropped 9% and Resolute Mining Limited (ASX: RSG) which fell almost 8%.

However, at the opposite end of the ASX we had shares like logistics software business WiseTech Global Ltd (ASX: WTC) seeing a share price rise of 12.7% and tech company Appen Ltd (ASX: APX) went up 7.1%.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Appen Ltd and WiseTech Global. The Motley Fool Australia has recommended REA Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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