S&P/ASX 200 unmoved after Josh Frydenberg unveils biggest budget deficit since World War II

Gold surged to a nine-year high on Wednesday as an escalation in US-China tensions stoked demand for the safe-haven asset, while silver followed to hit a near seven-year high.

Fortescue Metals Group - S&P/ASX 200 unmoved after Josh Frydenberg unveils biggest budget deficit since World War II
Oil prices moved lower on Wednesday after a surprise rise in US crude inventories

S&P/ASX 200 (INDEXASX:XJO) is flat at 6075 around 12.40 pm after confirmation of the biggest budget deficit since World War II and a continued rise in COVID-19 cases in New South Wales and Victoria.

At a special budget update today, Treasurer Josh Frydenberg said the budget will be in the red by $85.8 billion in 2019-20 and $184.5 billion in 2020-21, marking the biggest deficit since World War II due to drastic spending to mitigate the damage from the COVID-19 pandemic.

Frydenberg added the unemployment rate was expected to reach 9.25% in the December quarter, while real GDP would fall by 0.25% in 2019-20 and shrink 2.5% in 2020-21.

Victoria recorded 403 new COVID-19 cases and five further deaths in the last 24 hours. New South Wales has 19 new cases.

Iron ore drops but gold gains

The materials sector was flat with iron ore and gold miners moving in opposite directions.

BHP Group Ltd (ASX:BHP) fell 0.56%, Rio Tinto (ASX:RIO) dropped 1.38% and Fortescue Metals (ASX:FMG) shed 1.37% after iron ore prices edged lower overnight.

Newcrest Mining (ASX:NCM) was up 1.76% after gold topped $US1,870 an ounce and edged towards all-time highs.

Top gainers

Today’s top gainers on the ASX include Engage:BDR Ltd (ASX:EN1) (+25.00%), Kingwest Resources Ltd (ASX:KWR) (+13.33%), Brookside Energy Ltd (ASX:BRK) (+20.00%), Domacom Australia Ltd (ASX:DCL) (11.90%) amd Whitebark Energy Ltd (ASX:WBE) (+33.33%).

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