The S & P / ASX 200 index fell 0.54% to 7,239.7 after falling more than 1% early in the session to its lowest level in nearly two months.
Australia confirmed two cases of the new Omicron variant on Sunday, putting plans to reopen the country at risk.
Omicron, dubbed a “variant of concern” by the World Health Organization, is potentially more contagious than previous variants. Experts do not yet know whether it will cause COVID-19 to be more or less severe compared to other strains.
“Global markets sold out last week after the Omicron shake, and while we rebounded a bit today, markets will be nervous until there is more clarity,” Brad said. Smoling, Managing Director of Smoling Stockbroking.
The mining and tech sectors led the partial recovery after the initial drops as iron ore prices rose and bond yields fell, while financial and travel stocks suffered most of the sell-off.
Falling bond yields pushed financial stocks down 1.07% to multi-month lows. Commonwealth Bank of Australia, the country’s largest lender, fell 1.1%, while the rest of the “big four” banks slipped between 0.8% and 1.7%.
Travel shares fell to multi-month lows, with airline operator Qantas Airways hitting its three-month low, while online travel sites Flight Center Travel Group and Webjet fell 11.3% and 8.4%, respectively.
Major miners rose 0.81% as Chinese iron ore futures rallied, with BHP Group, Rio Tinto and Fortescue Metals advancing between 1% and 2.4%.
Tech stocks climbed 0.59% as sharply lower bond yields lowered the cost of borrowing. Software maker TechnologyOne rose 3.1%, while network operator Megaport Ltd rose 1.7%.
New Zealand’s benchmark S & P / NZX 50 fell 0.8% to 12,531.7.