A wide range of ASX stocks are about to be hit by forced shutdowns in Victoria as the state grapples to control the second wave of COVID-19 cases.
The state’s premier Danial Andrews is ordering most retailers to shutter along with construction sites, car dealerships and manufacturing plants, reported the Australian Financial Review.
ASX stocks slumping on the news
The news sent the JB Hi-Fi Limited (ASX: JBH) share price and the Harvey Norman Holdings Limited (ASX: HVN) share price tumbling to intra-day lows. Both stocks tumbled over 2% each at the time of writing.
Listed auto dealerships also hit the lows of the Monday trading session. The AP Eagers Ltd (ASX: APE) share price crashed 5.6% to $7.66 while the Autosports Group Ltd (ASX: ASG) share price lost 2.3% to $1.27.
Another to lose steam in late trade is the Lendlease Group (ASX: LLC) share price. It lost 2.4% to $11.08, probably on worries that some of its construction sites will need to be closed.
New restrictions on construction
There will only be three types of construction that will be allowed to continue in metropolitan Melbourne but with stricter restrictions coming into force by midnight Friday.
Government infrastructure projects can continue. While the number of people working on these projects have been halved, the state government will be looking to reduce this even further.
Large non-residential construction projects with buildings above three storeys will be allowed to remain open.
However, operators will need to cut the number of workers to “a practical minimum” but with no more than 25% of their workforce.
For residential sites, operators cannot have more than five people working onsite at any one time.
Smaller companies to get more help
While the government is offering some financial support for businesses, its mainly aimed at smaller business and won’t make much difference to larger listed companies.
Premier Andrews isn’t ruling out providing more support packages targeting specific industries, but I don’t think these will make much difference to larger listed companies.
ASX winners benefiting from State of Disaster
On the flipside, this latest development sent shares in a handful of ASX stocks higher. The Kogan.com Ltd (ASX: KGN) surged nearly 10% to a record high of $18.31 ahead of the close.
The Coles Group Ltd (ASX: COL) share price and Woolworths Group Ltd (ASX: WOW) share price also outperformed the S&P/ASX 200 Index (Index:^AXJO). Supermarkets are allowed to operate during stage four restrictions and so are petrol stations.
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Brendon Lau owns shares of Woolworths Limited. Connect with me on Twitter @brenlau.
The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Kogan.com ltd. The Motley Fool Australia owns shares of COLESGROUP DEF SET and Woolworths Limited. The Motley Fool Australia has recommended Kogan.com 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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