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ASX edges higher as bank stocks rebound and oil prices surge
Australian shares made modest gains on Monday as takeover activity lifted several companies, while technology stocks and miners came under pressure.
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The ASX 200 rose 0.27 per cent to 8830.4 by midday Monday, supported by major bank gains after Friday’s technology-led sell-off.
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Energy stocks climbed 1.8 per cent as oil prices hit five-month highs amid renewed Middle East tensions, while technology stocks fell 2.7 per cent.
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Challenger shares surged more than 17 per cent following an $11.80-a-share takeover offer, while Cleanaway jumped nearly 20 per cent on a $9.4 billion bid.
Australia’s share market is limping forward into the new trading week, as beaten-down financials stocks continue their rebound, while oil price risks continue to stifle miners.
The S&P/ASX200 rose 24.7 points, or 0.27 per cent, to 8830.4 by midday, as the broader All Ordinaries rose 18.7 points, or 0.21 per cent, to 8959.1.
The bounce followed a tech-led sell-off on Friday as AI valuation and competition concerns dragged the Nasdaq back to earth from all-time highs, leaving the local bourse in a solid relative position, Moomoo chief market strategist Tapas Strickland said.
“While the US sell-off shows signs of forced selling, it is confined to technology rather than the wider market – the Dow Jones rose 0.7 per cent for the week, and the equal-weighted S&P 500 gained 0.5 per cent,” Mr Strickland said.
“This shift is a positive lead for Australia, which has low AI exposure and is seeing investors rotate into financials, energy and utilities.”
Australia’s major banks have helped lift the market in early trading.
The major banks led the way at the open, helping lift the financials sector more than 1 per cent in early trade before rolling off to a 0.3 per cent lead by midday.
Challenger Ltd stood out, rocketing more than 17 per cent to $11.52 after TAL Daiichi Life Australia offered $11.80 per share to buy out the investment management firm.
Technology stocks took the soft lead from their US counterparts, dragging the local IT sector 2.7 per cent into the red.
Energy stocks outperformed the market, the segment up 1.8 per cent after oil spiked to five-month highs over the weekend, following fresh Houthi attacks on Saudi Arabia’s East West pipeline and as more tankers were damaged by Iranian mines in the Strait of Hormuz.
Crude prices and their impact on the global growth outlook continued to weigh on local miners, with raw materials slumping 0.3 per cent.
Mega miners BHP and Rio Tinto traded slightly better than flat, but couldn’t offset weakness in battery minerals and precious metals producers.
Spot gold inched higher to $US4175 ($A5994) an ounce and is on the cusp of a fourth week ricocheting within its recent trading range.
The industrials sector was the best performer outside of energy, up 0.8 per cent after Cleanaway shares soared by almost a fifth after its board unanimously recommended shareholders approve a $9.4 billion takeover bid.
On the consumer side, staples continued to benefit from defensive positioning, up 0.6 per cent and with strong performances from Elders and Endeavour, while cyclicals fell 0.4 per cent.
In other company news, Mesoblast’s value shrank by more than a tenth despite net revenue from its Rynocil increasing by 44 per cent to $US28 million ($A40.2 million), after sales missed analysts’ forecasts.
The Australian dollar is buying 69.64 US cents, up from 49.62 US cents on Friday at 5 pm.
-AAP