ASX 200 index: Australia shares on back foot as COVID-19 cases surge

• The S&P/ASX200 wilts from best session levels in more than a month.
• EU rescue package and hopes for similar stimulus measures in Washington buoyed the risk-on sentiment on Wall Street. 

Shares have dropped in early trading on the Australian market as investors look to book profits after recent gains amid economic uncertainty and concerns over rising virus infections.

The S&P/ASX200 benchmark index was lower by 44.9 points, or 0.73 per cent, at 6111.4 points after the first 30 minutes of trade on Wednesday.

US markets lost steam in late trading but benchmarks still managed to close in the green, eking out fresh recovery highs on the news that the European Union reached an agreement on a massive coronavirus recovery fund.

Hopes for similar stimulus measures in Washington buoyed the risk-on sentiment.

The Dow Jones Industrial Average ended 0.6 per cent higher, the S&P 500 edged up 0.17 per cent, while a drop in technology shares resulted in the Nasdaq Composite dropping 0.81 per cent.

However, Aussie shares are not sharing the same optimism today.

• Aussie Retail Sales June +2.4% MoM in another big swing outcome

After notching their best session in more than a month, the US President's Donald trump comments over the surge in virus cases have weighed on sentiment.

• We’ve heard the numbers (Victoria COVID-19) today are not good - The Guardian

• We’re expecting to hear the Victorian numbers from Daniel Andrews in about 20 minutes.

A the time of writing, the ASX 200 Index is trading down 1% at 6-95, falling from a high of 6156. 

Tech stocks have led the fall with a 2.8% slide in the AXIJ.

Also, the health sector was down 2.88% cent and utilities fell 1.41%.

The heavyweight financial sector was also better off by 0.25 per cent.

Among the major banks, ANZ gained 0.37 per cent to $18.79, the Commonwealth rose 0.01 per cent to $74.44, NAB edged up 0.22 per cent to $18.30 and Westpac climbed 0.88 per cent to $18.28.

Commodity complex in focus

As for the commodity complex, gold and silver have stood out.

• Breaking: Gold jumps $15 to renew nine-year highs above $1865
• Silver Price Analysis: Bulls in charge at highest levels since 2013, critical structures identified

Also, crude markets surged with the positive backdrop of stimulus in Europe, the potential for extension of stimulus in the US and positive vaccine news all lifting sentiment. 

Copper jumped back above $6,500, ending trade up 1.2% at $6,563. That is only the second time it has closed above $6,500 in over a year.

In stocks, the major miners went into reverse with BHP losing 3.14 per cent to $37.58, Rio shedding 1.05 per cent to $104.97 and Fortescue slipping 1.85 per cent to $16.43.

However, shares in Oz Minerals rose 4.31 per cent to $13.54 after the company upgraded its guidance following a strong first half production of gold and copper.