ASX 200 Index bears seeking a discount on the bullish correction

• The ASX index is making a come back from the session lows, drawing the attention of the bears.
• A second wave of coronavirus cases is a major concern for investors. 

Australia's share market is pressured by the concerns of a second wave of coronavirus cases in the United States which continue to play havoc with the global economy.

The ASX is trading in the heels of the sharp falls we saw on Wall Street from Friday, with the Dow Jones index preceding 730 points, or 2.8 per cent, while the S&P 500 shed around 2.4 per cent.

At the time of writing, the ASX is moving off the lows down at 5806 following a steep sell-off at the start of the session from a high of 5906. Currently trading at  5841, the index is up 0.6%.

COVID's second wave

The Texas Governor ordered all taverns shut, California warned that it may have to re-impose some of its lockdown restrictions if the situation continues to deteriorate, and Pence was forced to postpone campaign events in Arizona and Florida.

Analysts at ANZ Bank explained.

Confidence in the ‘recovery’ trade is being challenged again and whilst policy-makers have implemented huge fiscal, monetary and credit measures, the magnitude of that policy support is unlikely to be repeated if the health situation really deteriorates on a widespread basis.

Financial market behaviour will critically depend on how the path of COVID-19 infections in the US unfold in coming days and weeks.

The market will also be nervous over the easing in travel restrictions across Europe last week, allowing holidaymakers flock to popular destinations. The European C-19 crisis spread wildly after the half-term break in February.

Commodities in focus

Meanwhile, end of quarter trading should see commodity prices remain volatile which could be a factor playing into the index this week.

Commodity markets were pushed and pulled in different directions amid rising COVID-19 case numbers, analysts at ANZ noted:

The ANZ China Commodity Index ending the session up 0.2%, mainly driven by a rise in base metal prices.

Aluminium led the sector higher, while copper and nickel were also stronger. Precious metals were up, as gold and silver prices gained. Energy was unchanged, with lower crude oil prices offset by gains in thermal coal.

Gains in the bulk commodities sector were limited, with only iron ore marginally higher. Agriculture was weaker.

ASX 200 Index

Turning to the charts, the index is has crossed a 38.2% Fib of the day's downside impulse which could draw in the attention of the bears seeking a discount from the sessions lows.

Bears will be targeting the lows of 5786 ahead of 5719.