Santos no deal weighs on share market

Petrina Berry
(Australian Associated Press)

 

The Australian share market has closed slightly lower as energy shares tumbled after Santos rejected a $US10.9 billion takeover offer.

The benchmark S&P/ASX200 dropped 0.16 per cent to 6,032.5 points, while the broader All Ordinaries index shed 0.16 per cent to 6,140.2 points.

Santos shares dropped 54 cents, or 8.4 per cent, to $5.90 after the oil and gas producer rejected the recently upgraded offer from US private equity firm Harbour Energy, and terminated their negotiations.

CMC Markets chief market strategist Michael McCarthy said said other energy players fell because investors who had expected Santos to sell bought into other oil and gas companies to maintain their exposure to energy.

“They have tried to get ahead of the game before the Santos deal went through,” he said.

“Now that the deal has fallen through they are holding too much in terms of energy and are now selling down those other stocks they bought to replace Santos.”

Beach Energy dropped 3.6 per cent to $1.74, Woodside Petroleum shed 1.2 per cent to $33.80 and Oil Search dropped 1.9 per cent to $8.41.

In the healthcare sector, CSL dropped 1.1 per cent to $182.30 and Cochlear shed 0.8 per cent to $194.67.

Liver cancer treatment provider Sirtex Medical slumped 2.8 per cent to $29.00 after US giant Vairan Medical Systems said it would not increase its takeover offer for Sirtex after a Chinese private equity firm lobbed a higher bid.

Westpac was the only major bank not to fall, adding 0.1 per cent to $28.46, while Commonwealth Bank was the weakest of the big four, dropping 0.6 per cent to $69.81 after agreeing to sell its stake in Chinese life insurer BoComm Life for $668 million.

Telstra remains at a seven year low despite its best session in more than two months, adding 1.5 per cent to $2.78.

Commonwealth Bank currency strategist Joseph Capurso said resurfacing concerns about emerging markets, particularly Turkey, weighed on Asian equity markets and in turn pulled the Australian dollar lower.

ON THE ASX:

* The benchmark S&P/ASX200 was down 9.4 points, or 0.16 per cent, at 6,032.5 points

* The broader All Ordinaries index was down own 9.7 points, or 0.16 per cent, at 6,140.2 points

* The SPI200 futures contract was down six points, or 0.1 per cent, at 6,041 points.

* National turnover was 2.8 billion securities traded worth $6.2 billion.

CURRENCY SNAPSHOT AT 1700 AEST:

One Australian dollar buys:

* 75.33 US cents, from 75.88 US cents on Tuesday

* 83.09 Japanese yen, from 83.35 yen

* 64.06 euro cents, from 64.52 euro cents

* 56.25 British pence, from 56.55 pence

* 109.23 NZ cents, from 109.04 NZ cents

GOLD:

The spot price of gold in Sydney at 1700 AEST was $US1,290.24 per fine ounce, from $US1,288.10 per fine ounce on Tuesday.

BOND SNAPSHOT AT 1630 AEST:

* CGS 5.75 per cent May 2021, 2.188pct, from 2.201pct on Tuesday

* CGS 2.25pct May 2028, 2.8413pct, from 2.8656pct

Sydney Futures Exchange prices:

* June 2018 10-year bond futures contract was 97.150 (implying a yield of 2.850pct), from 97.125 (2.875pct) on Tuesday

* June 2018 3-year bond futures contract was 97.765 (2.235pct), from 97.755 (2.245pct)

(*Bond market closes taken at 1630 AEST previous local session; currency closes taken from 1700 AEST previous local session)

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