The Australian sharemarket took a dive at open on the back of a negative lead from Wall Street, then clawed back losses to close marginally lower in an action-packed day full of takeover action, including a bidding war between retail giants.
The benchmark S&P/ASX200 index eased 10.7 points or 0.15 per cent to 7225.2, while the All Ordinaries Index dipped 20.9 points or 0.28 per cent to 7536.9.
Saxo Markets’ Australian market strategist, Jessica Amir, said it seemed global share markets might not be on track for a traditionally bullish December, if the first two days of trade were anything to go by.
“They’ve been wild and ugly,” Ms Amir said.
“The S&P500 had its worst two days since October 2020 amid Omicron cases being detected in the US, while South Africa reported a doubling of virus cases in the last 24 hours.
“In Australia, the share market is at risk of a possible correction.”
OMG chief executive Ivan Tchourilov, however, said there was still enough buying power in the market to stop a serious free fall.
“Solid economic numbers, part of the inflationary issue, are buoying certain parts of the market, but taking away from our tech and micro-cap valuations,” he said.
“The prospect of a Santa Claus rally is also not entirely out of view, despite sideways movement since September.”
Tech stocks weighed heavily after the Nasdaq sank 1.8 per cent overnight.
Afterpay’s takeover suitor, US-based financial services company Square, announced it was changing its name to Block, while the shareholder meeting to vote on the acquisition has been bumped due to delays getting regulatory approval from the Bank of Spain.
But Royal Bank of Canada’s Chami Ratnapala said there was no reason to worry.
“We continue to believe the risks of the transaction closing are minimal,” she said.
Afterpay slumped 6.09 per cent to $100.02 and other buy-now-pay-later stocks followed their market leader, with Laybuy tumbling 16.98 per cent to 22 cents – making it the worst performer in the All Ords – Zip sliding 3.17 per cent to $4.89 and Sezzle dropping 1.79 per cent to $3.84.
Accounting software provider Xero shed 5.1 per cent to $141.14.
Epically, Woolworths took on Wesfarmers with a rival bid for Priceline Pharmacy owner Australian Pharmaceutical Industries, as they wrestle for exposure to the growing health and wellness sector, sending API rocketing 16.05 per cent to $1.735 after climbing as high as $1.765 in intraday trade.
The supermarket giant has offered $1.75 per share or $872m, which has been backed by API as being “reasonably likely to be superior” to the $1.55 or $763.6m offer by the Bunnings owner.
Wesfarmers holds a 19.3 per cent stake in API and had previously secured the backing of API’s board.
Woolworths lifted 0.38 per cent to $39.99 and Wesfarmers put on 1.37 per cent to $57.82.
“Perhaps Wesfarmers might be thinking of sharpening their pencil on that one,” CommSec analyst Tom Piotrowski said.
The Fair Work Ombudsman has commenced legal action against Coles, alleging it underpaid more than 7500 employees a total of $115m.
Coles shares dipped 0.5 per cent to $17.65.
Crown Resorts gained 0.73 per cent to $11.02 after saying a $12.50 per share takeover offer from Blackstone did not represent compelling value, but has flung open its books so the American private equity giant can undertake initial due diligence and come back with a better bid.
Solomon Lew’s Premier Investments, which owns brands including Just Jeans, Smiggle, Portmans and Peter Alexander, slipped 0.83 per cent to $29.98 after holding its annual general meeting and providing a trading update showing a sales hit from lockdowns.
More than 42,000 trading days were lost this financial year, but sales have bounced back recently with the reopening of stores, the company said, flagging planned refurbishments of Dotti and Jay Jays stores.
Investment bank Macquarie Group lifted 1.47 per cent to $198.56 after announcing former Reserve Bank of Australia governor Glenn Stevens would be its next chairman, taking over from Peter Warne from early May.
ANZ inched five cents higher to $26.69, Commonwealth Bank advanced 2.15 per cent to $95.90, National Australia Bank added 0.8 per cent to $27.60 and Westpac shed 0.78 per cent to $20.46.
Financial services company Netwealth Group was the worst performing stock in the top 200, slumping 6.47 per cent at $15.19.
Lithium miner Orocobre lost 5.87 per cent to $9.46.
At its recent AGM, Orocobre highlighted that Chile – home to more than half of the world’s lithium reserves – was working on new regulation for the metal, which could dent the long-term price, Ms Amir said.
“So this puts lithium companies on ice for now, until we have further clarity about the price they can make,” she said.
Rio Tinto weakened 1.63 per cent to $94.20, BHP dropped 0.48 per cent to $39.71 and Fortescue inched two cents lower to $17.25.
The Aussie dollar was fetching 71.01 US cents, 53.42 British pence and 62.72 Euro cents in afternoon trade.
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