Aussie shares are rebounding from Friday’s declines with the ASX rising 55 points or 0.77% to 7,329 at lunch on Monday. Local markets have been supported by gains on Wall Street on Friday and also news that the Chinese central bank, People’s Bank of China (PBoC) easing policy to help support the country’s economic recovery by cutting the Reserve Requirement Ratio (RRR) for major banks.
As a result of the news from China, the materials sector is by far the standout in the opening few hours of trade. Major miners, BHP Group (BHP) is rising 3.4% while Fortescue (FMG) and Rio Tinto (RIO) around 2% higher as well. Energy, financials and healthcare are among the other strong performers while consumer staples and utilities are the worst performing sectors.
In company news, Australian Pharmaceutical Industries (API) is one of the big winners, lifting 19%, after the company behind Priceline Pharmacies received a near $680 million takeover proposal from Wesfarmers (WES). The offer is for $1.38 per share which represented a 21% premium to API’s closing price last Friday. API’s major shareholder, Washington H. Soul Pattinson (SOL) has agreed to vote in favour of the proposal. The offer is still subject to several approvals from shareholders and regulators. WES shares are flat so far today.
Healthcare company, Healius (HLS) has acquired a Queensland-based imaging company called Axis
Diagnostics. HLS will also rebrand its diagnostic imaging division as Lumus Imaging. HLS shares are 0.4% higher.
Diary and infant formula maker, a2 Milk Company (A2M) is down 1.4% after announcing that it was re-organising its Asia Pacific division into three separate business units to provide more dedicated focus on its key components. The change was prompted by the recent resignation of its Asia Pacific Chief Executive, Peter Nathan. The divison will comprise of China domestic business; International export business; and Australia & New Zealand (ANZ) domestic business.
The AUD buys 74.73 US cents, it was boosted by the news the PBoC cut the RRR to support Chinese economic growth. China is easily Australia’s largest export destination. But the stronger USD will continue to weigh on AUD.
Published by CommSec