ASX flat after ‘holiday hangover’; Insignia shares surge

Welcome to your five-minute recap of the trading day.

The numbers

The Australian sharemarket finished flat after advancing early on Monday, following a positive lead from Wall Street as investors finally dived in to buy the dip in US stocks.

The S&P/ASX 200 gained 6.9 points, or 0.1 per cent, to 8257.4 points at close, with six of the 11 industry sectors in the green. The Australian dollar gained, and was valued at US62.30¢ as at 4.56pm AEDT.

The ASX 200 is expected to continue to benefit from Wall Street’s positive start to the new year.Credit: Louise Kennerley

The lifters

Insignia Financial was the best performing stock on the ASX, surging 14.7 per cent after the wealth business formerly known as IOOF said it had received a non-binding $2.9 billion takeover proposal – priced at $4.30 a share – from private equity firm CC Capital Partners.

The proposal was received on Friday, and it represents a 7.5 per cent premium to an earlier offer of $4 a share from Bain Capital, which Insignia rejected last month.

CC Capital was created by former Blackstone Inc. dealmaker Chinh Chu, who has overseen deals to take companies such as Getty Images and Utz Brands public, with the interest in Insignia adding to growing interest in Australian wealth managers exposed to the $4.1 trillion national pension pool.

The takeover bid – which would require foreign investment and regulatory approval – firms as the first mergers-and-acquisitions battle of 2025, and is set to elevate global intrigue in Australia’s increasingly lucrative pension system.

The tech sector was the biggest winner on Monday (up 0.8 per cent), following a strong trading day for AI stocks on Wall Street. The rally in local technology stocks was led by giants WiseTech Global (up 1.3 per cent) and Xero (up 1.7 per cent), while TechnologyOne (up 0.2 per cent) also gained.

Real estate was also a strong mover, buoyed by gains to Goodman Group (up 1.8 per cent), Scentre Group (up 0.6 per cent) and Charter Hall Group (up 0.8 per cent).

The energy sector continued some of its positive momentum from the previous week, with Woodside (up 1.2 per cent) propping up industry gains. Uranium miners Boss Energy and Deep Yellow continued their gains from last week, adding 5.8 per cent and 5.9 per cent respectively.

Commonwealth Bank, the largest stock on the ASX, rose by 0.6 per cent. NAB (up 0.8 per cent) and Westpac (up 0.2 per cent) also gained. Macquarie rose (up 0.6 per cent), as did insurers Suncorp (up 0.4 per cent) and QBE (up 0.6 per cent).

Block, the Jack Dorsey-founded financial services firm, rose 5.5 per cent on Monday. Block emerged as one of the major beneficiaries of the Bitcoin price surge that followed Donald Trump’s election victory in November, and is projected to be a major lifter on the local bourse in 2025.

The laggards

Falling iron ore prices steered the mining sector into the red. BHP lost 2 per cent, while Fortescue (down 2 per cent) and Rio Tinto (down 1.7 per cent) also fell.

The Perth-based Bellevue Gold lost 14 per cent on Monday, after telling shareholders it would slash its production targets for the 2024-25 financial year. Fellow gold miners Newmont (down 2 per cent) and Northern Star Resources (down 0.6 per cent) also fell.

The lowdown

EToro market analyst Josh Gilbert said the markets experienced a “holiday hangover” on Monday, noting the flat result and small trading volumes, but added that results from the tech sector indicated a continuing surge from the industry observed in 2024.

“The tech sector was coming from a tailwind from US stocks – they were winners from last year and investors are seeing value there after a three- or four-day selloff,” Gilbert said.

Concerns about a slowing Chinese economy and a potential trade war between China and the US were among the reasons for a “struggling” materials sector, which Gilbert said would always point to a difficult trading day on the ASX.

Wall Street beat a five-day drop, which shaved more than a trillion dollars off share prices, on Friday. The Nasdaq 100 climbed 1.7 per cent while the S&P 500 rose 1.3 per cent. The gains put a dent in the week’s selloff after an end-of-December rout had stretched into the first trading day of the year.

In the US markets, the AI theme continues to motivate investors even as they contemplate Donald Trump’s return to the White House in 16 days’ time.

President-elect Donald Trump’s imminent return to the White House has triggered some caution at the Fed.Credit: AP

“We really need to see more of that clarity on Jan 20 for markets to have greater conviction,” Laura Cooper, global investment strategist at Nuveen, said on Bloomberg Television. “US exceptionalism will continue to be the dominant theme at least in the first half of the year, regardless of what some of those policies that come through are.”

Tweet of the day

Quote of the day

“December 2024 quarter gold production was affected by lower grade as the mine sequence progressed through the outer edges of the orebody moving towards the higher-grade core.”
– An excerpt from Bellevue Gold’s production and guidance update, in which it announced slashed gold production guidance for the 2024-25 financial year, triggering a mass selloff.

You may have missed

Rupert Murdoch has sailed into the new year with more bad news in tow, even as the media mogul strives to resolve the succession struggle that threatens the future of his empire.

Days after Christmas, Fox Corporation lost a motion in the US courts to dismiss a lawsuit from his fellow investors.

with Bloomberg

The Market Recap newsletter is a wrap of the day’s trading. Get it each weekday afternoon.