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30 May Markets at a glance

Asian equity markets face a stormy session, ASX erases all gains for the month, BHP walks away from Anglo bid, and China lifts some Australian beef bans.

It is a sea of red for equity markets across the Asian region with bonds taking a hit as investors bet global interest rates will stay higher for longer.

MSCI’s broadest index of Asia-Pacific shares outside of Japan have extended yesterday’s slide, tracking a negative lead from Wall Street, while Japan’s Nikkei 225 has tumbled over 1.5% breaking below the 37,000 mark, with weakness across most sectors led by technology stocks. US futures have also come back online trading in the red.

Here at home, the S&P/ASX200 is moving in line with its regional peers to trade lower, erasing gains for the month as sentiment turns bearish. The benchmark is on track for its seventh day of losses out of the past eight session and is set to post its second straight losing month. Miners and interest-rate sensitive financials are leading the drag. Gold and energy players are under pressure after commodity prices fell on fears the U.S. Federal Reserve could keep interest rates higher for longer. Investor’s focus remains on PCE inflation data released at the end of the week state side.

Bigger picture, China has lifted bans on imports from five major Australian beef processing facilities, the latest sign of cooling tensions between Beijing and Canberra.

The bans, which were imposed between 2020 and 2022, were around the same time China barred imports of several other commodities, including coal, timber and wine and came after Australia called for an independent investigation into the origin of COVID-19.

The removal of restrictions should boost Australian shipments to China, which have risen to their highest levels since 2020 amid shrinking cattle herd in the US, Australia’s main competitor. 

Stock specific, Australian listed shares of BHP Group (BHP) are in focus after the mining giant walked away from its AU$49 billion plan to take over London-listed rival Anglo American, after a six-week long pursuit. Under the proposed structure of the deal, BHP required Anglo to divest its South African platinum and iron ore businesses, which was a major reason the deal didn’t go through.

Under UK rules, BHP cannot return to the table for at least six months, unless there is another offer for Anglo. 

Meantime, Wesfarmers (WES) has agreed to sell its LPG distribution and its LNG distribution businesses to SupaGas and Clean Energy Fuels Australia, respectively,

Finally, Technology One (TNE) is trading ex-dividend.  

All prices and analysis at 30 May 2024.  The content is distributed by WealthHub Securities Limited (WSL) (ABN 83 089 718 249)(AFSL No. 230704). WSL is a Market Participant under the ASIC Market Integrity Rules and a wholly owned subsidiary of National Australia Bank Limited (ABN 12 004 044 937)(AFSL No. 230686) (NAB). NAB doesn’t guarantee its subsidiaries’ obligations or performance, or the products or services its subsidiaries offer.  This material is intended to provide general advice only. It has been prepared without having regard to or taking into account any particular investor’s objectives, financial situation and/or needs. All investors should therefore consider the appropriateness of the advice, in light of their own objectives, financial situation and/or needs, before acting on the advice.  Past performance is not a reliable indicator of future performance.  Any comments, suggestions or views presented do not reflect the views of WSL and/or NAB.  Subject to any terms implied by law and which cannot be excluded, neither WSL nor NAB shall be liable for any errors, omissions, defects or misrepresentations in the information or general advice including any third party sourced data (including by reasons of negligence, negligent misstatement or otherwise) or for any loss or damage (whether direct or indirect) suffered by persons who use or rely on the general advice or information. If any law prohibits the exclusion of such liability, WSL and NAB limit its liability to the re-supply of the information, provided that such limitation is permitted by law and is fair and reasonable. For more information, please click here.

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