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Gains from Santos (STO) and mining stocks BHP Billiton (BHP), Rio Tinto (RIO) and Newcrest Mining (NCM) have helped offset most of this morning losses. The ASX 200 is now largely flat which is an improvement on the market open. Earlier, shares were down by as much as 0.6 per cent and slumped to near six-month lows.
Investors were expecting a softer start to the holiday-shortened week, month and quarter following concerns of a US/China trade war and technology stocks like Amazon coming under pressure on some attacks by President Trump.
March is now behind us, in what ended up being the worst month for local stocks in more than two years. It also was the worst quarter for the ASX 200 since mid-2015 and the worst start to a year since 2008. What could be supportive for markets to an extent are the billions in dividends that will be paid out to investors. Approximately $5bn in dividends will be paid this week after the $10bn last week. BlueScope (BSL), Super Retail Group (SUL) and NIB Holdings (NHF) are paying dividends today.
Santos (STO) is the standout on Tuesday, lifting by ~20 per cent after receiving a $13.5bn takeover offer from US group Harbour Energy. This is a 28 per cent premium to Santos’ share price last week. The US$4.98 (~A$6.50/share) offer is comprised of US$4.70 (A$6.13/share) in cash and a US$0.28 (A$0.37) special dividend. Harbour Energy said the deal would be funded by taking on US$7.75bn in debt and the rest from equity.
A2 Milk (A2M) is up 2.3 per cent after trying to reassure investors this morning it is ‘uniquely positioned to benefit’ from demand for A2 milk infant formula and “…has not seen any change in the growth of its China business”. A2M fell by 10 per cent last week on concerns that Nestle is launching a competing product in China.
Newcrest Mining (NCM) is up 2 per cent on a firmer gold price. NCM has recommenced production at its Cadia mine and expects to be back at full production in coming weeks.
Foxtel & FOX SPORTS Australia have merged into a single company, 65 per cent owned by NewsCorp and 35 per cent held by Telstra.
On the economic front, the latest CoreLogic home prices data has been released, with prices falling 2.1 per cent in Sydney over the year to March. The latest data on job advertisements has also been released. The number of job ads in Australia was flat in March, but is still up a very solid 11.5 per cent over the year which is a good sign for jobs growth in 2018.
1.4bn shares have changed hands so far today, worth $2.2bn. 418 stocks are up, 686 are down and 338 are flat.
Published by CommSec