AU Morning Wrap: ASX Edges Lower; Lithium Stocks Rally on Allkem Merger

Moomoo News AU wrote a column · May 10, 2023 19:18

G'day, mooers! Check out the latest news on today's stock market!
• Nasdaq rallies to 10-month high
• Allkem set for US$10bn merger
• Stocks to watch: Allkem, Westpac, GrainCorp
- Moomoo News AU

AU Morning Wrap: ASX Edges Lower; Lithium Stocks Rally on Allkem Merger

Wall Street Summary

U.S. stocks and bonds rose Wednesday after fresh data showed inflation cooled for the 10th consecutive month.

The consumer-price index rose to 4.9% in April from a year ago, easing slightly from a 5% increase in March. It was up 0.4% for the month, in line with economists' expectations.

Stocks rose after the data was initially released, then wavered before closing back up near session highs. The $S&P 500 Index(.SPX.US)$ added 0.4%, while the tech-heavy $Nasdaq Composite Index(.IXIC.US)$ rose 1%. The $Dow Jones Industrial Average(.DJI.US)$ edged lower for much of the trading session and ended down 30.48 points, or 0.1%.

AU Market Watch

The $S&P/ASX 200(.XJO.AU)$ edged 0.05 per cent, or 3.4 points, lower to 7252.3 in the opening minutes of trade, weighed by the financials sector.

Allkem surged 13.1 per cent to $14.60 after inking a merger with Livent to create a New York-listed $US10.6 billion ($15.7 billion) global lithium company.

The news had a positive read-through for the broader lithium sector; $Pilbara Minerals Ltd(PLS.AU)$ jumped 5.5 per cent to $4.80 and $Core Lithium Ltd(CXO.AU)$ added 3.9 per cent to $1.06.

Westpac fell 3.3 per cent to $20.98 as it trades ex-dividend today.

$Graincorp Ltd(GNC.AU)$ jumped 6.6 per cent to $7.57 and Goodman Group firmed 1.6 per cent to $20.11 after both companies upgraded their FY23 earnings guidance.

$Orica Ltd(ORI.AU)$ advanced 1.2 per cent to $16.67 as it swung to a statutory net profit of $122.6 million for the half year ended March 31.

$Scentre Group(SCG.AU)$ edged 0.4 per cent higher to $2.85 after reconfirming its funds from operations guidance.

Stocks to Watch

$Allkem Ltd(AKE.AU)$: Allkem will merge with Livent to create a New York-listed $US10.6 billion ($15.7 billion) global force in lithium to be chaired by Peter Coleman.

The enlarged business will be 56-44 controlled by Allkem shareholders, who will receive one share in the new company for each Allkem share held.

The combined business will have a presence on the ASX via CHESS depositary interests with inclusion in the S&P/ASX 200.

$Nextdc Ltd(NXT.AU)$: NextDC has announced two new data centre developments as part of its regional expansion strategy which will be funded by a new $618 million entitlement offer.

The data centres will be built on recently acquired commercial property sites in Kuala Lumpur, Malaysia, and Auckland, New Zealand.

$Goodman Group(GMG.AU)$: Goodman Group says it delivered a strong operational performance in the third quarter, and has subsequently upgraded its FY23 earnings guidance.

The company now forecasts FY23 operating earnings per security growth of 15 per cent.

$Silver Lake Resources Ltd(SLR.AU)$: Gold producer Silver Lake Resources has submitted a revised indicative proposal to $St Barbara Ltd(SBM.AU)$ to acquire its Leonora assets in Western Australia.

Consideration for the revised offer is $707 million, comprising $326 million cash and 327.1 million shares, valued at $381 million.

Silver Lake said the proposal directly addressed key concerns of the St Barbara board regarding Silver Lake's previous proposal.

Trading Ex-div: $Westpac Banking Corp(WBC.AU)$

Dividends Paid: $Myer Holdings Ltd(MYR.AU)$

Listing: None

Source: Dow Jones Newswires, AFR

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