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Takeover talk fails to inspire Australian market

Daily Market Update

The Australian market retreated on Thursday, but in a barely noticeable manner; the benchmark S&P/ASX 200 slipped 5.1 points to 7,173, while the broader All Ordinaries index lost 2 points, to 7,384.

Financial services house Perpetual jumped $1.59, or 6.7 per cent, to $25.35 after the firm formally rejected a $3 billion buyout proposal from investment conglomerate Washington H. Soul Pattinson to break up the funds business. Perpetual said the unsolicited offer “materially undervalues” the company’s various businesses. As for the suitor, Washington H. Soul Pattinson lost 88 cents, or 2.6 per cent, to $33.04. In other takeover news – at this stage, still only strengthening rumour – the market is contemplating an $80 billion merger between oil and gas heavyweights Santos and Woodside Energy. The media is now reporting that discussions are definitely underway, and the companies confirmed that this morning. A merger of Woodside and Santos would create a globally relevant LNG player. But investors are sitting on the fence: on Thursday Woodside appreciated 13 cents, to $29.97, while Santos added 5 cents, to $6.83.

  • Momentum in the miners

    In the big miners, BHP moved 19 cents, or 0.4 per cent, higher to $47.42; Rio Tinto lifted $1.31, or 1 per cent, to $127.76; and Fortescue was up 40 cents, or 1.6 per cent, to $25.48. Lithium producer Pilbara Minerals rose 17 cents, or 5 per cent, to $3.58; fellow producer Allkem firmed 23 cents, or 2.7 per cent, to $8.78; IGO, which mines nickel as well as lithium, appreciated 21 cents, or 2.7 per cent, to $8.03; and Mineral Resources, which produces iron ore and lithium, gained $1.01, or 1.7 per cent, to $60.73. In coal, Whitehaven Coal advanced 7 cents, or 1 per cent, to $7.16.

    Aluminium and alumina producer Alumina gained 3 cents, or 3.9 per cent, to 81 cents. Copper miner Sandfire Resources rose 5 cents, or 0.8 per cent, to $6.38; and mineral sands producer Iluka added 5 cents, or 0.7 per cent, to $6.92. African-based uranium miner Paladin Energy slid 6 cents, or 6 per cent, to 94 cents.

    Among the big banks, National Australia Bank was down 13 cents, or 0.4 per cent, to $29.19; ANZ lost 10 cents, also 0.4 per cent, to $24.60; and Commonwealth Bank softened 7 cents, to $106.27; but Westpac did not get the memo, advancing 12 cents, or 0.6 per cent, to $21.91. 

    Biotech giant CSL eased 98 cents, or 0.4 per cent, to $266.49; while Telstra weakened 1 cent, to $3.84.

    US markets on hold ahead of November jobs number In the US, markets were largely torpid ahead of the US employment report for November, due out tonight. Economists polled by Dow Jones expect that 190,000 jobs were added in November, a step up from the prior month. Investors are hoping for signs of cooling in the labour market, leaving the Federal Reserve comfortable with its decision to halt interest rate hikes.

    The Dow Jones Industrial Average and the S&P 500 both snapped three-day losing streaks. The 30-stock Dow Jones added 62.95 points, or 0.2 per cent, to 36,117.38, while the broader S&P 500 lifted 36.25 points, or 0.8 per cent, to 4,585.59. The tech-heavy Nasdaq Composite index pushed 193.28 points higher, up 1.4 per cent, to 14,339.99. Google shares jumped 5 per cent, a day after the company announced its latest artificial intelligence model, called Gemini. In the bond market, the US 10-year yield gained 4.7 basis points, to 4.156 per cent, while the 2-year yield softened 1.3 basis points, to 4.586 per cent.

    Gold is up US$1.47, to US$2,028.38 an ounce. In oil, the global benchmark Brent crude oil grade advanced 14 cents, or 0.2 per cent, to US$74.44 a barrel, while US West Texas Intermediate retreated 4 cents, to US$69.34 a barrel.

    The Australian dollar is buying 65.98 US cents this morning, up from 65.55 cents at the ASX close on Thursday.

    James Dunn

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

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