The S&P/ASX 200 closed up on Wednesday, gaining 9.80 points, or 0.13%, to 7,364.80. Link Administration was 15% higher and Pilbara Minerals was up more than 8% by the close. Afterpay was 5% higher by the end of the day's session after hitting a 52-week low on Tuesday.
Link Administration had requested a trading halt at the start of the day but hit a 9-month high of $5.51 on the reopen of trading. Canadian software company Dye & Durham has launched a buyout proposal for Link Administration Holdings for $C3.2bn ($3.5bn). Dye & Durham said it has entered into an agreement with Link to buy the business for $5.50 a share.
The Australian dollar is trading at around US71.22c compared with around US71.50c at 8.30am AEDT.
It appeared the Santa Rally had started early overnight as the Dow Jones Industrial Average gained 560.54 points, or 1.6%, to 35,492.70, helped by gains in Nike and Boeing. The S&P 500 jumped nearly 1.8% to 4,649.23 as nine of the 11 sectors registered gains. The technology-focused Nasdaq Composite added 2.4% to 15,341.09. The small-cap benchmark Russell 2000 climbed 2.9% for its best day since July 20. The FTSE 100 and the DAX each gained about 1.4%.
However, investment advisor Wells Fargo believes the equity markets will continue to correct until the summer of 2022, reports CNBC. However, it also believes shares like Microsoft, Apple, Meta (formerly Facebook), and JPMorgan Chase will provide a safe haven for long-term investors. “We believe it is time to move up in quality and down in risk,” said a client note.
The Santa Rally phenomenon is said to occur in the final week of December and the first two trading days in January. Whether because of increased consumer confidence or a last end of year investing spree, markets historically have almost always climbed during that time period.
Mining giant Rio Tinto will pay $US825m to buy the undeveloped Rincon lithium project from private equity owners Sentient Equity Partners, adding the project to its Jadar lithium play in Serbia.
Macquarie Equities upgraded its lithium price outlook to reflect strong EV sales volumes and buoyant spot lithium prices. The stronger lithium price outlook has driven material upgrades to Macquarie's earnings forecasts for MIN, IGO, PLS, AKE and LTR.
"Strong underlying demand for lithium, primarily from the electric vehicle market, has pushed spot lithium prices to record levels," Macquarie said.
"We continue to expect prices to peak in mid-2022 but have upgraded our peak spodumene assumption by about 100% to reflect the strength in prices. Our calendar year 2022 regional lithium prices rise 3-18% and we lift CY23-CY25 prices by 12%-22% to reflect the higher peak."
It notes that lithium production rates have increased over 2021, with solid increases from spodumene producers in Western Australia and rising production from South America. However, the increase has failed to supress spot lithium prices.
BHP pulls out of Noront
BHP said it would not seek to acquire Canadian nickel play Noront Resources, as it won’t match the price for the company offered by Andrew Forrest’s Wyloo Metals.
Wyloo trumped BHP’s C75c a share offer for the company last week by almost 50 per cent, throwing down a $C1.10 offer for the nickel explorer after the failure of talks about a potential deal to end the bidding war. Wyloo already controls about 37% of Noront shares, and said last week it would not support any alternative bids for Noront.
Oil gains, gold ranging
WTI crude futures remain above $71 per barrel on Tuesday, after falling more than 5% in the previous two sessions. Brent is trading at almost $74 a barrel.
Gold has formed a rough double top around the $US1815.00 region which will present a strong barrier to $US1840.00. Support is seen at $US1790.00, followed by $US1780.00 an ounce. The levels are expected to keep gold range bound for at least a week.