BHPs great escape from shale: Aus shares close 0.9% higher

Market Reports

by Clive Tompkins

It has been a positive day of trade for the Australian share market. After opening higher following positive leads and news of BHP selling its US oil shale assets, the market held on to gains to close at or near the highs of the day.

As for the sectors, most closed with a profit, except Staples.

At the closing bell, the S&P/ASX 200 index closed 56 points higher, or 0.9 per cent higher, to finish at 6,300.

Futures

Dow futures are suggesting a rise of 22 points.

The ASX200 futures are eyeing a 49 point gain.

Value of trades

The value of trade was $8.0 billion on volume of 988 million shares at the close of trade. The top three stocks by value were CSL Limited (ASX:CSL), BHP Billiton (ASX:BHP) and Commonwealth Bank of Australia (ASX:CBA).

Economic news

The Producer Price Index rose more than expected in the June quarter, with the inflationary guide for the business sector rising 1.5 per cent year-on-year to the June quarter end, beating the dip of 0.7 per cent year-on-year expected. The last reading was up 1.7 per cent over the year.

Company news

Gina Rinehart’s Redstone Corp takeover offer of Atlas Iron (ASX:AGO) for $390 million is now unconditional. It comes as an independent expert report found the offer was fair and reasonable. Acceptances of the takeover must be received by 3 August unless the Hancock offer is extended. Atlas Iron (ASX:AGO) shares closed flat at $0.04.

BHP (ASX:BHP) has inked a deal to sell its US oil and gas assets for US$10.8 billion cash. It comes as BP agreed to snap up BHP’s Petrohawk Energy Corporation, which owns the Eagle Ford, Haynesville and Permian assets onshore in the US for US$10.5 billion. Meanwhile, Merit Energy Company’s MMGJ Hugoton III will snap up BHP’s 100 per cent stake in BHP Petroleum for US$0.3 billion. Both sales are expected to be completed by the end of October 2018.

AMP (ASX:AMP) has advised its dividend will be at the lower end of its FY18 payout ratio guidance of 70 to 90 per cent. AMP is accelerating its advice remediation process, which will result in a $290M (after-tax) allowance (provision) in its first half 2018 result. At the same time, it advised its underlying profit for the same period will be between $490 and $500 million.

Lithium carbonate producer Orocobre (ASX:ORE) has backed Canadian lithium explorer Advantage Lithium’s private placement, by investing C$5 million of its C$12 million raise.The funds will be used by Advantage for general capital and to fund Advantage’s exploration in Argentina. Orocobre will own 33.5 per cent of the fellow Argentinian lithium company following the placement.

IPOs

Neuroscientific Biopharmaceuticals (ASX:NSB) started trading today. The peptide drug developer floated with an issue price of 20c, opened at 28c and closed at 22.5c.

Best and worst performers of the day

The best-performing sector was Energy, adding 1.63 per cent, while the worst performing sector was Consumer Staples, shedding 0.38 per cent.

The best-performing stock in the S&P/ASX 200 was Wisetech Global (ASX:WTC), rising 3.98 per cent to close at $17.26. Shares in Aurizon Holdings (ASX:AZJ) and Sigma Healthcare (ASX:SIG) followed higher.

The worst-performing stock in the S&P/ASX 200 was St Barbara (ASX:SBM), dropping 12.30 per cent to close at $4.37. Shares in Sandfire Resources (ASX:SFR) and AMP (ASX:AMP) followed lower.

Asian markets

Japan's Nikkei has gained 0.6 per cent, Hong Kong's Hang Seng has lost 0.2 per cent and China's Shanghai Composite has lost 0.3 per cent.

Wall Street

The Dow Jones gained 1.8 per cent, the S&P 500 added 1.3 per cent and the Nasdaq gained 0.4 per cent.

Commodities and the dollar

Gold is trading at $US1,223 an ounce.
Light crude is $0.24 up at $US69.54 a barrel.
The iron ore price gained 0.7% to $66.03 and its futures are pointing to a rise of 2.73 per cent.
One Australian dollar is buying 73.82 US cents.

Cryptocurrencies

Bitcoin is trading 3.62 per cent lower at US$7,925, Ethereum is trading 3.1 per cent lower at US$464 and EOS is trading 4.6 per cent lower at US$8.23.