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Aussie shares are lifting for a third day and briefly hit a fivemonth high on the open thanks most to gains from CSL, Macquarie (MQG), Insurance Australia Group (IAG), BHP and energy stocks. This is despite the absence of a fresh catalyst, losses from US equities overnight and escalating trade tensions between the US and China.
In recent days the US has been preparing tariffs on US$50bn of Chinese imports while China said it would retaliate with a 25 per cent tariff on 659 US products. According to media reports, President Trump on Monday also threatened to impose a 10 per cent tariff on $200bn of Chinese goods.
The major event of the week is yet to come in the form of a key meeting of oil producing nations in Vienna, Austria on Thursday and Friday. The outcome of this meeting could be for oil prices as oil supply will be a key talking point. The member states and allies will likely decide whether or not to relax quotas which have been in place for some time to support prices. The next question will be by how much as this has been a contentious issue.
Locally, a few of the retailers have been under pressure today as a major broker cut its price targets on JB Hi-Fi (JBH), Harvey Norman (HVN) and Super Retail Group (SUL).
Property stocks are the worst performers, miners are mixed while the banks are not heading in the same direction either.
Gains from CSL Limited (CSL), MQG, IAG, BHP and energy stocks are supported the market most at lunch.
Insurance Australia Group (IAG) is the best of the insurers, lifting by 2.5 per cent after announcing the sale of its Thai and Indonesian units for $525m to Japanese insurer Tokio Marine. IAG will also sell its 73 per cent stake in Vietnam’s AAA Assurance.
Atlas Iron (AGO) is a touch higher after lifting by 22 per cent on Monday. A company controlled by Gina Rinehart’s Hancock Prospecting launched an all-cash takeover valuing the junior iron ore miner at ~$390m. The $0.042/share takeover was approximately a $56m or 17 per cent premium to its market cap on Friday. AGO has now commenced a matching rights process, giving Mineral Resources – which already made an all-scrip bid for the company – three business days to make a counter proposal.
1.4bn shares have changed hands so far worth $2.2bn. 504 stocks are up, 537 down and 409 are unchanged.
Published by CommSec