Australian shares rise on mining boost; Santos plunges after merger talks collapse


By Sneha Kumar

Feb 7 (Reuters) - Australian shares closed higher on Wednesday, helped by miners as commodity prices rose on hopes of more stimulus measures by China to support its faltering equity markets, while Santos plunged after merger talks with Woodside Energy collapsed.

The S&P/ASX 200 benchmark index .AXJO climbed 0.5% to 7,615.8. The benchmark had closed 0.6% lower on Tuesday.

Iron ore futures rebounded from a two-week low after Beijing signalled authorities were ramping up efforts to support sagging domestic stock markets, boosting shares of the Australian iron ore giants. IRONORE/

Mining stocks .AXMM led the gains in Sydney, jumping 1.3% in their best day in about two weeks. BHP Group BHP.AX, Rio Tinto RIO.AX and Fortescue FMG.AX advanced between 0.9% and 1%.

Josh Gilbert, a market analyst at eToro, said support to the Australian market from the Chinese economy is broadly good news, "given the sort of the weighting" that the local benchmark has towards China.

Meanwhile, Pilbara Minerals PLS.AXsoared 5.6% in its biggest gain in two weeks after the country's top pure-play lithium miner extended a spodumene concentrate supply agreement with Chengxin Lithium Group 002240.SZ.

Financials .AXFJ rose 0.3%, with top lender Commonwealth Bank of Australia CBA.AX gaining 0.2%.

Analysts remain divided on the interest rate-cut timeline in Australia, with those at ANZ Group expecting the easing cycle to begin in November, while those at CBA expect the first cut to come in September.

Analysts at Barclays expect the Reserve Bank of Australia to start cutting rates in the third quarter of this year, with a quarter-point reduction expected in August and a total of 75 basis points of cuts this year.

Santos STO.AX ended 5.8% lower in its worst session since late September 2022, after talks ended with bigger rival Woodside Energy WDS.AX on a $52 billion merger.

In New Zealand, the benchmark S&P/NZX 50 index .NZ50 rose 0.2% to 11,952.17, its highest close since Aug. 2 last year.

(Reporting by Sneha Kumar in Bengaluru; Editing by Subhranshu Sahu)


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


More Related Articles

Info icon

This data feed is not available at this time.

Sign up for Smart Investing to get the latest news, strategies and tips to help you invest smarter.