Aussie Fires Trip Stock Market Alarms 🔥
Aussie Fires Trip Stock Market Alarms
Australia is the aridest habitable place on Earth, a 7.6 million square mile tinderbox that lights up every bushfire season. Last year, a persistent drought stoked flames across the country’s eastern coast, and now this is the worst locals have ever seen it. So far, the blazes have claimed 29 lives, 2,000 homes, and over a billion animals. Wild!
Hot embers are also starting to land on Australia’s economy. Consumer confidence has fallen to four-year lows, and financiers have already begun swapping their Australian dollars for currencies that are not so charred. Of course, the fallout is moving stocks in the region, too. Thus, investors are being thrown a ball to swing at.
One noticeable impact is visible in the Oceania tourism sector. For a start, Qantas Airways recently pulled flights to the capital Canberra. Investors sold the news and offloaded even more shares when AccorHotels spoke of 60% accommodation cancellation rates and profits on the lower end of analysts’ guidance. Shares in both companies have suffered a very similar trading pattern. However, not all Aussie stocks are quite so flammable!
Crown Resorts, anyone? The gambling funhouse has managed to fireproof its share price with a heavily domestic customer base, probably needing an escape right now. It also seems that for many industries involved in supply chains and resources, demand isn’t going to be lost for ever. It’s expected to rebound once fires are put out and probable flash floods are drained. In terms of further recoveries for beat up tourism stocks, the government is working overtime to convince travelers that there are still things worth going to see in Australia.
Time will heal, and that’s why some investors are buying into the ASX200 exchange right now on top of their donations to relief efforts. The country’s best companies are open for business, and for a limited time only, they may be on sale!