• The ASX fell 1.1% at market open on Tuesday, reflecting a downturn experienced in the US market linked to the coronavirus Delta variant.
• Fears over the new strain’s transmissibility have shaded investor sentiment abroad.
• Some analysts predict extended lockdowns in Greater Sydney and Victoria could punch a hole in projected GDP growth for the quarter.
• Visit Business Insider Australia’s homepage for more stories.

The ASX fell 1.1% at market open on Tuesday, echoing a downturn in the US market spurred by fears of the coronavirus Delta variant and its potential to constrain surging economic growth.

The Australian ASX200 index fell from Monday’s close of 7286.0 to nearly 7206.0 around 10.30am, before staging a recovery and fluctuating around 7260.0 near midday.

That domestic slump arrived after the US Dow Jones industrial average shed nearly 2.1%, or 725.81 points, to close at 33,962.04 — the index’s worst day of the calendar year.

Growing coronavirus outbreaks and the global prevalence of the Delta variant have spooked investors, the Washington Post reports, as rising case numbers diminish some optimism caused by widespread vaccination.

Traders stepped away from the travel and tourism sector over Monday, the paper reports, with Carnival Cruises and United Airlines shedding 5.7% and 5.5%, respectively.

At home, physical retail appears to be feeling the brunt of the Delta variant.

Unibail-Rodamco-Westfield, operators of the Westfield shopping centre chain, fared the worst of any ASX-listed company, dropping by 5.14% through Tuesday morning.

That downturn coincides with lingering fears over the coronavirus lockdowns in both Sydney and Melbourne, which threaten to constrain consumer spending at brick-and-mortar retail centres.

The impact of those lockdowns is already evident, according to the Commonwealth Bank. As Greater Sydney churns through its third full week of lockdown measures, card spending in NSW is now just below July 2019 levels, Commbank says.

NSW card spending was averaging 17% above 2019 levels before the restrictions kicked in, the bank states.

A situation differs in Victoria, which on Tuesday learned its lockdown restrictions will extend to Tuesday, July 27.

Commbank states that in the week ending July 16 — which included just one full day of the state’s latest lockdown — card spending was 12.9% above 2019 levels, with that figure well below the 17% average observed before its last lockdown in May.

With spending suddenly constrained across Australia’s two largest cities and thousands of businesses forced to close their doors, analysts predict the shutdowns could punch a hole in projected GDP growth for the September quarter.

According to the Sydney Morning Herald, KPMG estimates a 40-day lockdown for Greater Sydney and ten days of restrictions in Victoria could ultimately wipe 1.5 points of GDP growth from the national tally.

An estimated cost of $10 billion could see the quarter’s GDP shrink by 0.5%, KPMG estimates. Beyond the transmissibility of the Delta variant, altered levels of government support — including the absence of the JobKeeper wage subsidy — could also hamper the latest recovery, chief economist Brendan Rynne told the paper.

Along with the alternative financial support measures provided by federal and state governments, the private sector has extended some leeway to hard-hit borrowers, with some banks stepping in to offer home loan deferrals to borrowers facing financial distress.

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