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Local shares joined most other markets in a rally in early trade on Monday. At lunch the ASX 200 was off session highs with a gain of 48 points or 0.7%. At the best levels of the morning the Index was ahead by 69pts or 1%. Sector gains were led by Energy names – after oil prices rallied by 2% at the weekend. Despite the solid headline gain for the market, several subsectors were in the red, led by Telecoms and Utilities. The improve market sentiment followed the latest developments in the US-China trade dispute. US equities advanced at the weekend after Donald Trump announced a partial trade deal, reaching agreement on intellectual property, financial services and big agricultural purchases.

“Phase One” of the trade agreement between the two powers will see China increase its annual purchases of US agricultural products. At the same time the Chinese will open their market to US financial service providers and improve the transparency of their foreign exchange market. The particularly contentious areas of Intellectual property and forced technology transfer were also dealt with in the negotiations. In exchange the US will delay the tariff increase on US$250 billion worth of Chinese imports which was to come into effect this week.

Energy names were the most improved sub-group after global oil prices rose by more than 2% at the weekend with energy security in the Middle East remaining front of mind. Iranian media reported that a state-owned oil tanker was attacked in the Red Sea near Saudi Arabia. An additional catalyst for the higher prices was the thawing of the détente surrounding the US-China trade war. Over the course of last week Brent rose by 3.7% and Nymex rose by 3.6%. Elsewhere, Santos (STO) shares rose 6% or 49 cents to $7.92 after announcing an agreement to buy LNG assets located in Northern Australia from US energy firm ConocoPhillips for US$1.39B . This includes assets in Darwin LNG, Bayu-Undan in offshoreTimor and the Barossa and Poseidon assets. Among other measures, Santos said shareholders will see cash flow breakeven oil prices fall by approximately US$4 per barrel in 2020.

Elsewhere, shares in Seven West Media (SWM) were 4% or 1 cent higher at 38 cents after confirming the group is in discussions to sell its magazine business. SWM said it was responding an ASX query arising out of media speculation this morning and highlighted that no binding agreement had been concluded, while any agreement would be subject to regulatory approval and obtaining other consents. SWM’s titles include Better Homes, New Idea & That’s Life.

Splitit Payments (SPT) shares surged by 15% or 9 cents to 69 cents following an update on its North American operations. The group announced several new partnerships, including eCommerce platform Shopify, which will see SPT’s buy now pay later (BNPL) solution available to Shopify’s network of more than 800,000 merchants across 20 countries. SPT said its technology has been integrated with Shopify’s platform and is now listed directly inside Shopify as an integrated payment gateway. At the same time Shopify’s merchants can add Splitit functionality to their websites and offer customers a payment option linked to existing credit cards.

In currency trade the AUD/USD retreated from the 68 US cent mark. In the days ahead key influences will be the significant amount of Chinese economic data due this week, including economic growth figures for the September month and quarter. In Australia, the September Australian labour force data will be the focus (Thursday). A short time ago the local unit had recovered from session lows to be at 67.80 US cents.

Published by CommSec