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Aussie shares fell from a seven-week high as declines in Wesfarmers, CSL and some of the banks offset gains in resource stocks.
The S&P/ASX 200 dropped 18 points or 0.23 per cent as US equity futures retreated.
BHP rallied after selling a Queensland coal business. Westpac climbed off a nine-month low. Macquarie Group and ANZ dragged as they traded ex-dividend.
What’s driving the market
Investors were reluctant to add to positions following a string of record closes in the US. The major US indices finished last week at all-time highs, but looked short-term over-extended after an extraordinary run that has seen the S&P 500 log seven straight records and the Nasdaq ten sessions without a retrace.
The passage of President Joe Biden’s flagship infrastructure bill through Congress late on Friday failed to pique buying interest. S&P 500 futures slid nine points or almost 0.2 per cent this morning.
With last week’s central bank meetings out of the way, attention this week swings to jobs (Australia), corporate trading updates (both) and inflation (US). The Australian October employment report lands on Thursday, US producer prices tomorrow night and consumer prices on Wednesday night.
Job vacancy figures this morning underlined the challenge facing employers in an increasingly tight labour market. Skilled job advertisements climbed a seasonally-adjusted 7.8 per cent last month to a 13-year high, according to the National Skills Commission.
The annual general meeting season paused this session before sparking up tomorrow with updates from Fortescue Metals and Bendigo & Adelaide Bank. BHP, Coles and Newcrest are among heavyweights holding meetings later in the week.
Going up
BHP accelerated its retreat from fossil fuels by selling its 80 per cent interest in BHP Mitsui Coal to Stanmore Resources. The deal values BHP’s stake in the Queensland metallurgical coal venture at up to US$1.35 billion. Stanmore shares jumped 15.22 per cent. BHP gained 1.25 per cent.
Sydney Airport climbed 2.79 per cent after agreeing to be acquired by a consortium of investors in a deal valuing the stock at $23.6 billion. The company has entered into a scheme implementation deed with the Sydney Aviation Alliance.
“Reopening stocks” rallied after Pfizer reported its Covid-19 pill could reduce hospitalisations by as much as 89 per cent. Flight Centre jumped 4.98 per cent, Qantas 4.45 per cent, Webjet 3.02 per cent and Corporate Travel Management 1.55 per cent.
Gold’s highest finish since early September boosted miners. St Barbara put on 5.75 per cent, Evolution Mining 5.38 per cent, Regis 3.86 per cent and Newcrest 1.78 per cent.
Energy companies rose as a rebound in crude off a four-week low accelerated this morning. Woodside gained 3.28 per cent, Santos 3.07 per cent and Beach Energy 4.3 per cent.
Going down
Aristocrat Leisure sagged 1.78 per cent after its takeover of UK gaming software firm Playtech was threatened by a rival bid. Playtech’s largest shareholder, Hong Kong investment firm Gopher Resources, has requested access to Playtech’s books to perform due diligence. Aristocrat noted the board of Playtech had already recommended its bid.
Wesfarmers eased 1.19 per cent after emerging as the winner of a tussle with Sigma Health to acquire Australian Pharmaceutical Industries. The retail conglomerate will acquire API for $1.55 a share in a deal valuing the target company at more than $760 million. API gained 3.37 per cent. Sigma shares retreated 0.9 per cent.
Macquarie Group dropped 0.78 per cent from record levels as its shares traded ex-dividend. Also going ex-dividend, ANZ shed 2.15 per cent.
The rest of the banks were mixed as the bond market attracted a bid. Yields on ten-year Australian government bonds sank five basis points to their lowest in two and a half weeks.
Westpac rose 1.02 per cent and NAB 0.21 per cent. CBA dipped 0.18 per cent from Friday’s all-time closing high. CSL shed 0.68 per cent.
Incitec Pivot fell 0.79 per cent after announcing its Gibson Island manufacturing plant will close at the end of next year. The explosives and fertiliser firm said it had been unable to secure an economically viable long-term gas supply, but would explore repurposing the facility to produce green ammonia.
Other markets
A lacklustre morning on Asian markets saw the Asia Dow fall 0.56 per cent, Hong Kong’s Hang Seng 0.67 per cent, Japan’s Nikkei 0.21 per cent and China’s Shanghai Composite 0.12 per cent.
Oil started the new week at a sprint. Brent crude surged US$1.20 or 1.4 per cent to US$83.92 a barrel.
Gold rose US$1.80 or 0.1 per cent to US$1,816.60 an ounce.
The dollar dipped 0.04 per cent to 73.92 US cents.
