ASX snaps 4-day rally, ACCC gives go ahead for M&A’s: ASX closes 0.3% lower

The Australian sharemarket snapped its 4-day winning streak as optimism faded over the fight to combat the Omicron variant. The local bourse recovered from session lows of 0.4 per cent before staging a rally towards lunch time.

The index started to get momentum early afternoon trading as high as 0.2 per cent until market participants’ concerns were reinforced by the US futures pointing to a flat start. The local market was trading in a narrow range with eight of the 11 sectors closing lower.

The Japan Nikkei had a choppy session though the Shanghai Composite and the Hang Seng bucked the trend as investors continued to ‘celebrate’ on the prospect of a brighter future after the People’s Bank of China made changes to its monetary policy to help support the economy amid a property crunch.

Despite this, since Black Friday which turned to red Friday, oil prices slumped amid fuelled concerns on the efficacy of the vaccines, severity of Omicron, and what it means on crude demand. However, since then, energy stocks have been clawing back their losses but retreated today.

The energy sector was the worst performing sector followed by consumer discretionary, and information technology stocks. Utilities and healthcare were the only two outperformers. Amid the rise in Covid-19 cases in Europe and the work from home mandate revived in the UK, along with positive news from early trials by Pfizer and BioNTech, healthcare giants CSL (ASX:CSL) added 0.1 per cent, while Sonic Healthcare (ASX:SHC) rose 1.2 per cent.

Shares in Oil Search (ASX:OSH) fell 1.4 per cent to $4.14 after Papua New Guinea’s National Court gave its final nod to the $23 billion merger with Santos (ASX:STO) with the final condition for the deal slated on Friday.

Santos (ASX:STO) lost 1.6 per cent to $6.62 after the oil giant inked a deal to divest a minority stake in its $5.1 billion Barossa gas project off Australia’s north coast to giant Japanese LNG buyer JERA.

Across the iron ore miners Fortescue Metals (ASX:FMG) rallied for its fourth straight day adding 1.5 per cent bucking the trend from BHP (ASX:BHP) falling 1.2 per cent and Rio Tinto (ASX:RIO) closing 0.9 per cent lower.

Meanwhile, gold miner Newcrest (ASX:NCM) rose 0.3 per cent after the company released “particularly encouraging” exploration results from its East Ridge prospect which is part of its Red Chris holdings in the Canadian province of British Columbia.

Elsewhere, the ACCC was busy giving the green light on a number of merger deals in the horizon.

Sydney Airport (ASX:SYD) took off adding 2.9 per cent at $8.59 after the competition watchdog and the EU competition regulator approved the takeover of the owner of Kingsford Smith Airport by a consortium of superannuation funds and infrastructure investors.

Prime Media (ASX:PRT) added 1.2 per cent at $8.59 after the competition watchdog gave the tick of approval for the sale of Prime’s business and assets to Kerry Stokes Seven West Media (ASX:SWM) which tumbled 3.9 per cent at $0.615.

Cleanaway Waste Management (ASX:CWY) fell 0.7 per cent at $2.92 after the ACCC waved through its acquisition of locally based assets from rival French group Suez.

The major lenders closed mixed. Commonwealth Bank (ASX:CBA) and National Australia Bank (ASX:NAB) added up 0.2 per cent while Westpac (ASX:WBC) and ANZ (ASX:ASX) both closed 0.2 per cent lower.

Elsewhere, Genex Power (ASX:GNX) jumped 2.6 per cent at $0.195 after the renewable energy generator inked an offtake deal with Tesla for the Bouldercombe Battery project near Rockhampton in central Queensland. Genex will use Tesla’s real-time trading and control platform, Autobidder. The EV car maker is already supplying the batteries for the project and will provide a minimum level of contracted revenue to support project financing for the development.

In more EV news, Gina Rinehart-backed Vulcan Energy (ASX:VUL) inked a deal with auto giant Volkswagen to supply at least 34,000 tonnes of battery grade lithium for five years.
Volkswagen Group and Vulcan have also agreed to a first right of refusal to invest in additional capacity in the Zero Carbon Lithium™ Project. Underpinning the handshake included a successful kick off on commercial operation and full product qualification. The key ingredient in batteries for electric vehicles is slated for delivery for 2026 with pricing to be based on market prices or on a take-or-pay basis.

At the closing bell, the S&P/ASX 200 was 0.3 per cent or 21 points lower at 7,385.

Local economic news

Payroll jobs rose by 0.2 per cent in the fortnight to November 13, following a rise of 1.5 per cent in the previous fortnight, according to figures released on Thursday by the Australian Bureau of Statistics.

Futures

The Dow Jones futures are pointing to a fall of 61 points.
The S&P 500 futures are pointing to a fall of 8 points.
The Nasdaq futures are pointing to a fall of 27 points.
The SPI futures are pointing to a fall of 19 points when the market next opens.

Best and worst performers

The best-performing sector was Utilities, up 0.4 per cent. The worst-performing sector was Energy, down 1.1 per cent.

The best-performing stock in the S&P/ASX 200 was AGL Energy (ASX:AGL), closing 4.7 per cent higher at $5.84. It was followed by shares in Appen (ASX:APX) and Sydney Airport (ASX:SYD).

The worst-performing stock in the S&P/ASX 200 was Redbubble (ASX:RBL), closing 9.3 per cent lower at $3.02. It was followed by shares in Magellan Financial Group (ASX:MFG) and Zip Co (ASX:Z1P).

Asian markets

Japan’s Nikkei has lost 0.3 per cent.
Hong Kong’s Hang Seng has gained 0.9 per cent.
China’s Shanghai Composite has gained 1 per cent.

Commodities and the dollar

Gold is trading at US$1786.05 an ounce.
Iron ore is 1.4 per cent lower at US$107.00 a ton.
Iron ore futures are pointing to a fall of 3.6 per cent.
Light crude is trading $0.72 higher at US$73.08 a barrel.
One Australian dollar is buying 71.72 US cents.