Banks, energy stocks help lift Australian shares
Australian shares ended higher on Monday , lifted by strength in financial and energy stocks, while a wave of takeover activity helped the benchmark extend gains for a second consecutive session. The benchmark S&P/ASX 200 index closed 0.4% higher at 8,845.70 points, its highest level since September 9. The index closed 1% higher on Friday. Energy stocks climbed as much as 2.2% to their highest…
Australian shares experienced a rise on Monday, bolstered by strong performances in financial and energy sectors, as a surge in takeover activity propelled the benchmark index to a new high for the second consecutive day. The S&P/ASX 200 index concluded the session at 8,845.70 points, marking its highest level since September 9.
On Friday, the index had climbed 1%. Energy stocks surged by up to 2.2%, reaching their highest point since mid-September, driven by a 6.4% gain in New Hope after the coal mining company announced a deal to acquire Malabar Resources, valued at approximately A$2.4 billion. Shares in major players Santos and Woodside Energy increased by 2.3% and 2.7% respectively.
Financial firms saw a 0.9% increase, primarily due to Challenger, which agreed to a takeover proposal from a subsidiary of Japan’s Daiichi Life Holdings. The proposal valued Challenger at around A$7.94 billion, causing its shares to surge 19.3% to hit an eight-year high. The 'Big Four' banks also witnessed a rise, with their shares moving between 0.7% and 1.5%.
Initial employment data for August revealed a decline, prompting a reassessment of the Reserve Bank of Australia's potential rate increase in November, though a hike is still anticipated in the coming months. Analyst Tim Waterer from KCM Trade noted that while lower rate expectations provide temporary support, valuation and net interest margin risks persist, especially if fresh inflation data reignites the prospect of further tightening.
Among other acquisitions, Cleanaway Waste Management rose 20.2% following a deal for A$9.3 billion with Swedish private equity firm EQT. FleetPartners also gained 7.1% after being bought out for A$1.13 billion by SG Fleet, backed by Pacific Equity Partners. Technology stocks, however, saw a decline of 1.3%, mirroring the struggles of US counterparts as concerns emerged that debt-laden AI infrastructure firms might not generate profits soon enough to repay their debts. New Zealand's benchmark S&P/NZX 50 index closed at 13,652.07 points, down 0.7%.
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