Lithium leads local market

Australian shares closed slightly weaker on Thursday, with the benchmark S&P/ASX 200 index finishing down 3.8 points at 7,251, while the broader All Ordinaries fell 2.6 points to 7,449.

In the materials sector, lithium producer Allkem was the focus of attention after its $15 billion merger announcement.

The Brisbane-based company, which produces lithium in Argentina and Australia, has agreed to an all-stock merger with the New York Stock Exchange-listed Livent. Existing Allkem shareholders would own 56 per cent of the combined entity, which, based on recent share prices, would be worth about $15.7 billion.

Allkem finished up $2.03, or 15.7 per cent, to $14.94. Elsewhere in lithium, Allkem’s fellow producer Pilbara Minerals surged 23 cents, or 5 per cent, to $4.78; IGO, which produces nickel and lithium, gained 21 cents, or 1.5 per cent, to $14.69; and Mineral Resources, which mines iron ore as well as lithium, added $1.05, also 1.5 per cent, to $73.58.

Some of the lithium project developers were licking their lips on the Allkem news. Lake Resources surged 6.5 cents, or 12.8 per cent, to 58 cents; Core Lithium jumped 9 cents, or 8.8 per cent, to $1.11; Liontown Resources rose 4 cents, or 1.4 per cent, to $2.93; Piedmont Lithium advanced 3 cents, or 3.6 per cent, to 86 cents.

BHP eased 45 cents, or 1 per cent, to $44; Rio Tinto slid $1.91, or 1.7 per cent; to $109.01; and Fortescue Metals gave up 41 cents, or 2 per cent, to $20.22.

In gold, Northern Star eased 15 cents, or 1.1 per cent, to $13.88, Newcrest Mining shed 20 cents, or 0.7 per cent, to $28.89, and Evolution Mining retreated 2 cents to $3.88.

In coal, Whitehaven Coal lost 9 cents, or 1.3 per cent, to $7.00; New Hope Corporation also retreated 9 cents, in its case 1.7 per cent, to $5.17; Yancoal Australia was down 6 cents, or 1.1 per cent, to $5.40; but Stanmore Resources eked out a 2-cent gain, to $3.01.

On the oil and gas front, Woodside Energy gained 7 cents, or 0.2 per cent, to $33.81; Santos gave back 2 cents to $7.18; and Brazilian-based producer Karoon Energy added 3 cents, or 1.5 per cent, to $2.01.

Going with the grain

Grain exporter Graincorp surged 71 cents, or 10 per cent, to $7.81, after upgrading its full-year FY23 guidance. Despite interim net profit declining 18.7 per cent, to $200 million, the company said its export program ran at close to “full capacity” in the first half.

Among the big banks, ANZ advanced 20 cents, or 0.8 per cent, to $24.31; Commonwealth Bank rose 50 cents, or 0.5 per cent, to $98.35; and National Australia Bank lifted 11 cents, or 0.4 per cent, to $26.37; but Westpac didn’t get the memo, losing 57 cents, or 2.6 per cent, to $21.13.

UK rates hit post-GFC high

In the US, it was a fourth straight session of losses for the blue-chip Dow Jones Industrial Average, with the index losing 221.82 points, or 0.7 per cent, to end at 33,309.51. The broader S&P 500 retreated 7 points to 4,130.62, while the tech-heavy Nasdaq Composite index gained 22.06 points, or 0.2 per cent, to 4,130.62.

In the bond market, the US 10-year Treasury bond yield slipped 4.1 basis points to 3.389 per cent, while the 2-year yield was flat at 3.899 per cent.

The Bank of England raised its base rate by another 25 basis points overnight to 4.5 per cent, the highest level since October 2008.

In commodities, gold retreated US$15.81, or 0.8 per cent, to US$2,015.78 an ounce, while the global benchmark Brent crude oil grade lost US$1.43, or 1.9 per cent, to US$74.98 a barrel, and US West Texas Intermediate oil gained 48 cents, or 0.7 per cent, to US$71.35 a barrel.

The Australian dollar is buying 67 US cents this morning, down from 67.68 US cents at Thursday’s ASX close.

James Dunn

James is an experienced senior journalist and host of The Inside Network's industry events.