Markets at a glance 26 September
Around the grounds
The Australian share market is higher for a second consecutive session as the heavyweight financial sector rebounds on the prospect of interest rates staying higher this year. The miners and gold plays are also higher, driven by strong commodity prices.
Diving into the detail, banks have recovered after three straight sessions of losses, as a high interest rate environment generally sees a boost to banks’ margins.
The mining plays are tracking a continued rise in the price of iron ore, rallying after a fresh batch of monetary easing policies from China which is boosting market sentiment.
Meantime, the Reserve Bank of Australia has warned borrowers against taking on excessive debt when interest rates eventually begin to fall. In its semi-annual Financial Stability Review the RBA again highlighted the resilience of households, businesses and banks in the face of 12-year high interest rates and sticky inflation.
In the news
Quick check in on some of the stocks to watch in today’s trade. Brickworks (ASX: BKW) has swung to a full-year loss hurt by impairments related to its property and building products segments largely due to a decline in building activity.
Looking ahead, the outlook remains cloudy with the company flagging its build products businesses in Australia and North America will face challenges over the next 12 months.
Shares though have surged in today’s trade, as those results beat analysts’ expectations and the company bumps up its final dividend to 43 cents per share, up a cent on last years payout.
Elsewhere, market darling CSL Ltd (ASX: CSL) shares are in focus as the company is granted a contract from the U.S. Department of Health and Human Services (HHS) to increase the U.S. government’s stockpile for bird flu vaccines to 40 million doses, in a deal worth AU$121.4 million.
The funding Is part of a partnership with the Biomedical Advanced Research and Development Authority (BARDA) which helps companies develop medical supplies to address public health threats.
In M&A activity, Australian listed shares of Platinum Asset Management (ASX: PTM) are in focus after the company rejected a non-binding takeover offer from Regal Partners (ASX: RPL) which valued the fund manager at around AU$616.5 million, as PTM says it undervalues the company.
Despite rejecting the offer, Platinum said it remained open to options from Regal or third parties, but emphasized any future proposal must reflect the company's value and growth potential.
Turning to the broker moves, Citi sees a ‘very low’ probability of a potential deal between REA Group (ASX: REA) and the U.K.’s Rightmove after Rightmove rejected a sweetened AU$12 billion takeover bid from Rupert Murdoch-owned REA, saying the bid was still ‘unattractive’.
REA can make a formal offer until September 30th for Rightmove or walk away. The stock is up 6.2% year to date as of last close.
Going global
Rounding this out on the global stage, Asian equities are tracking higher, extending yesterday’s rally fuelled by continued optimism over China’s aggressive stimulus package unveiled earlier in the week.
MSCI’s broadest index of Asia-Pacific shares outside Japan is up more than 1% to touch an over two-year high while Japan’s Nikkei 225 has surged nearly 2.5%.
It comes amid further reports from Bloomberg China is considering injecting up to 1 trillion yuan of capital into its biggest state banks to increase their capacity to support the struggling economy.
In the US investor focus remains on a raft of FOMC speakers later today, including a speech from FOMC Chair Jerome Powell, which markets are hoping could provide further insight around the path of policy and the US central bank.
Futures markets are now pricing in a roughly 62% chance of another 50 basis point cut at the Fed’s November meeting and sees a total of 77bps worth of cuts by year end, according to the latest CME FedWatch Tool.
Finally, currency markets are mixed with the Australian dollar a tick higher, while the euro and sterling have both retreated against the greenback. The yen meantime has clawed back from a three-week low touched int eh prior session after minutes from the Bank of Japan’s (BoJ) latest policy meeting showed policymakers were divided on how quickly the central bank should raise interest rates further.
All prices and analysis at 26 September 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.