ASX
An investor is reflected in a window as he looks at boards displaying stock prices and an advertisement for zero percent interest rate for purchasing a car at the Australian Securities Exchange in central Sydney, Australia, July 8, 2015. Reuters/David Gray
  • Australian shares are posting their biggest gains in close to a fortnight, with the ASX 200 index up 1 per cent to 5081.5. Energy stocks are leading the gains thanks to merger activity. US markets were closed on Monday for Labour Day while European markets edged higher.
  • Energy stocks are surging by 3 per cent thanks to takeover discussions between Woodside Petroleum (WPL) and Oil Search (OSH). WPL is down 2.6 per cent after announcing its intention to merge with PNG focused OSH in a deal worth ~$11bn. Under the proposal, OSH shareholders would receive 0.25 WPL share for each OSH share they own. The offer is subject to PNG regulatory approval and a review by OSH’s board. OSH shares are up by 16.2 per cent.
  • Santos (STO) is gaining 8.8 per cent at lunch following the takeover discussions taking place in the sector. STO is an uncomfortable position with too much debt on its books and an 82 per cent slump in half-year profit delivered last month.
  • The banks are up by as much as 1.9 per cent, with the majors adding ~9pts to the ASX 200.
  • Major mining stocks are firmer at lunch, helped by a 1.8 per cent rise in ore to US$56/t overnight. BHP is up 1.3 per cent while the smaller Rio Tinto (RIO) is 2.2 per cent firmer.
  • On the economic front, a monthly business confidence survey showed that corporate Australia was a little more pessimistic in August than a month earlier, while consumer confidence slumped by 5.8 per cent to a 14-month low last week. China trade data is due for released today.
  • 855.7m shares have been traded at lunch, worth $1.9bn. 493 stocks are up, 276 down and 294 are flat.

Steven Daghlian - Market Analyst (Author)

CommSec Daily Report

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