by Peter Milios
Mixed bag of results to open the final day of the trading week. Financials, Utilities and Real Estate are all up, whilst Healthcare is sharply lower and Energy and Materials are relatively flat.
In other news, BHP Group (ASX:BHP) has announced a non-binding proposal to acquire 100 per cent of OZ Minerals (ASX:OZL) for a cash price of $28.25 per OZL share. This is the second offer from BHP. The first was in August at a price of $25 per OZL share, valuing the company at $8.4 billion. The board is likely to take this offer.
At noon, the S&P/ASX 200 is 0.27 per cent or 19.40 points higher at 7155.10.
The SPI futures are pointing to a rise of 11 points.
Best and worst performers
The best-performing stock in the S&P/ASX 200 is Nanosonics (ASX:NAN), trading 5.31 per cent higher at $4.76. It is followed by shares in Coronado Global Resources (ASX:CRN) and OZ Minerals (ASX:OZL).
The worst-performing stock in the S&P/ASX 200 is Lovisa Holdings (ASX:LOV), trading 7.09 per cent lower at $23.86. It is followed by shares in Ramelius Resources (ASX:RMS) and The A2 Milk Company (ASX:A2M).
Asian news
Asian equities are trading mostly higher today. The Nikkei is trading 0.06 per cent higher, whilst the Kospi is 0.72 per cent higher.
Hang Seng futures are up strongly after the Nasdaq Golden Dragon index rallied 4 per cent overnight.
Asian bond markets taking cues from overnight selloff in Treasuries.
Inflation rally may be running out of steam
Some thoughts of the recent rally, which is largely driven by cooler October inflation data and to a lesser extent, China zero Covid tweaks and property support measures, may be running out of steam. A few dynamics in focus, including technicals with the S&P’s 200-dma average just under 3 per cent above current levels. While the broader positioning/sentiment narrative continues to be flagged as supportive, prime brokerage desks have highlighted the outsized de-grossing/short-covering that has already taken place over the last few weeks. Growth concerns are also back in the headlines with the cautious consumer discretionary takeaways from Target, deterioration in homebuilder sentiment and pickup in corporate cost-cutting and layoff announcements. Growth worries have been underpinned by new cycle lows (inversion) in key curves. Despite growth fears, no deviation in Fed’s higher-for-longer messaging
Company news
Estrella Resources (ASX:ESR) announced that it has entered into an ore processing and off-take agreement with Murrin Murrin Operations, a subsidiary of Glencore. The agreement now positions the company to move forward with the metallurgical extraction of 2,000 to 4,000 tonnes of high grade nickel sulphide ore from their nickel mine in Western Australia. Shares are trading 40 per cent higher at $0.014.
BHP (ASX:BHP) has submitted a revised non-binding proposal to the Board of OZ Minerals (ASX:OZL) to acquire 100 per cent of OZL by way of a scheme of arrangement for a cash price of $28.25 per OZL share. This offer price represents the final price BHP is willing to offer under the Revised Proposal, in the absence of a competing proposal. In response, BHP Chair, Ken MacKenzie stated: “BHP’s proposal would provide value to BHP shareholders by increasing exposure to future-facing commodities, attractive synergies and adding to our pipeline of growth options.” Shares are trading 0.66 per cent higher at $44.09
Elixir Energy (ASX:EXR) provided an update on the Nomgon coal bed methane pilot project underway in its 100 per cent owned Nomgon pilot project in Mongolia. Pumping commenced earlier this week with a gas breakthrough already occurring. Managing Director, Mr Neil Young, said: “Flaring gas so soon after starting our production pilot is an incredible result for the Company. This is a first for Mongolia and we aim to establish a commercial flow rate in the months to come. Our on-site team – with great assistance as always from their Australian counterparts – has done a fantastic job in installing pilot facilities to a world class standard and we thank them accordingly.” Shares are trading 16.63 per cent higher at $0.185.
Commodities and the dollar
Gold is trading at US$1762.74 an ounce.
Iron ore is 0.3 per cent higher at US$98.35 a tonne.
Iron ore futures are pointing to a rise of 2.26 per cent.
One Australian dollar is buying 66.96 US cents.
