These ASX shares are swept up by the new Victorian COVID-19 lockdown

The new Victorian COVID-19 lockdown took the wind out of the ASX 200 with several ASX stocks seeing a surge in late trading activity.

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A record surge in COVID-19 cases in Victoria forced the state to reimpose stage three lockdowns and this impacted on several ASX stocks.

The Victorian premier Daniel Andrews announced the bad news late this afternoon after Victoria recorded 191 cases of coronavirus overnight with most of these cases stemming from unknown sources.

The lockdown, which encompasses all of metropolitan Melbourne and the Mitchell Shire, is a devasting blow to businesses and the Victorian economy.

ASX shares in lockdown blues

The news knocked the wind out of the S&P/ASX 200 Index (Index:^AXJO) with the benchmark closing flat after spending most of the day in the black.

ASX big bank stocks contributed to the weakness, particularly the Melbourne headquartered institutions. The National Australia Bank Ltd. (ASX: NAB) share price slumped 1.9% to $18.34 and the Australia and New Zealand Banking GrpLtd (ASX: ANZ) share price lost 1.6% to $18.81.

But even their Sydney HQ-ed counterparts didn’t far well. The Westpac Banking Corp (ASX: WBC) share price also declined 1.6% to $18.16, while the Commonwealth Bank of Australia (ASX: CBA) share price dipped 0.3% to $71.24.

Late selling pressure

It’s worth noting that most of the selling in the banks came in the last 30 minutes of trade. I suspect we will see further pressure on the sector tomorrow.

The return of stage three restrictions could exacerbate the bank’s bad debt problem as mortgagees and businesses in the state face renewed financial pressure.

The market had only priced in the impact of the first COVID-19 shutdown and no one knows yet how to quantify the impact from this new six-week restriction.

What you can expect though is further broker downgrades for some sectors ahead of the reporting season.

ASX shares benefiting from Victorian lockdown

On the flipside, several ASX companies saw their share price jump in the closing moments of trade today. The uncertainty left investors scrambling to buy ASX stocks that will either benefit from the pandemic or won’t be impacted by the dark COVID cloud.

One beneficiary is the Ansell Limited (ASX: ANN) share price. The disposable glove maker’s shares jumped 1.3% to close near its intraday high at $37.92.

Perhaps investors are counting on a fresh wave of panic buying at our supermarkets too. The Woolworths Group Ltd (ASX: WOW) share price and Coles Group Ltd (ASX: COL) share price saw a late surge in buying interest.

But investing based on what the coronavirus does or doesn’t do is not a winning strategy. Just as in the last market meltdown, staying calm and keeping an eye out for quality stocks being dumped is the right thing to do.

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Motley Fool contributor Brendon Lau owns shares of Ansell Ltd., Australia & New Zealand Banking Group Limited, Commonwealth Bank of Australia, National Australia Bank Limited, Westpac Banking, and Woolworths Limited. Connect with me on Twitter @brenlau.

The Motley Fool Australia owns shares of COLESGROUP DEF SET and Woolworths Limited. The Motley Fool Australia has recommended Ansell Ltd. 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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