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The Aussie market has started the week on the back foot with a sharp drop to start Monday’s session. The ASX 200 fell as much as 82 points or 1.1% but has since staged a slight recovery around lunch. The benchmark index is now down 60 points or 0.8% to 7,462 near midday. This follows a mixed session on Wall Street to finish last week after US jobs data missed market expectations.

Losses have been rather broad as well with nearly all sectors in the red. The energy sector is down the most while materials, healthcare, financials and communications are also among the main underperformers. The IT and utilities sectors are managing to eke out slight gains.

Individually, Fortescue Metals Group (FMG) is the largest drag on the market. The iron ore miner is sliding 9.7% and is singlehandedly wiping off ~18 points from the ASX 200 as it trades ex-dividend today. FMG is paying a record $2.11/share final dividend which doubles last year’s payment. It is also ~10% of its share price.

Major banks, such as Commonwealth Bank (CBA) and Westpac (WBC) are also weighing with CBA down 0.9%
and WBC losing 1%. Gold stocks are among some of the major improvers with Newcrest Mining (NCM) adding 2.4% and Northern Star (NST) lifting 2.5%.

In company news, Santos (STO) and Oil Search (OSH) are both falling over 3% each after announcing a one week extension to the exclusive period for conducting due diligence. In early August, it was announced that the two oil & gas producers had agreed to a proposed merger where Santos would offer 0.6275 of its shares for each OSH share, roughly $4.29 per OSH share.

Elsewhere, Mineral Resources (MIN) confirmed it sold its 5.4% holding in lithium miner Pilbara Resources (PLS) for ~$328 million with the sale being executed via a fully underwritten accelerated block trade offered to institutional investors. MIN will use proceeds towards its capital expenditure program. MIN Is down 0.6% while PLS drops 5.3%

Retail group Premier Investments (PMV) has confirmed that former JB Hi-Fi CEO Richard Murray has today
commenced as its new CEO, replacing the outgoing Mark McInnes. He was originally set to begin in early October.

Lastly, the Aussie dollar has softened to 74.37 US cents

Published by CommSec