SYDNEY: Australian shares rose on Friday, led by energy stocks, after talks of a potential $53 billion merger between Woodside Energy and Santos boosted the sub-index to log its best session in two weeks.
The S&P/ASX 200 index rose 0.3% to end the week at 7,194.90 points. The benchmark logged its biggest weekly gain since early November, climbing 1.7%.
Energy stocks closed 1% higher, their biggest daily gain since Nov. 24. Sector-majors Santos and Woodside Energy confirmed initial talks for a potential merger, which would create an A$80 billion ($52.86 billion) global energy behemoth.
Santos jumped as much as 11%, its biggest intraday rise since Nov. 10, 2020, while Woodside dropped as much as 3%.
Heavyweight miners rose 0.7%, gaining for a third straight session, as iron ore prices continued their winning streak buoyed by robust export data from China.
Top miners BHP and Rio Tinto climbed 0.7% and 0.9%, respectively.
“This could be the start of a big turn for commodities as we look into next year. Chinese stimulus is working its way through its economy plus the fall in the US dollar is also helping,” said Jessica Amir, market strategist at Moomoo.
Financial stocks ended 0.1% higher and posted their third straight week of gains. The “big four” banks rose between 0.7% and 3.1% this week.
Meanwhile, the Australian Government outlined the new policy structure of the country’s central bank in its biggest shake-up in three decades, with its flexible inflation target of 2% to 3% remaining front and centre.
“The new Statement has both hawkish and dovish changes. However, our overall assessment is that it does not materially add to the case for additional RBA (Reserve Bank of Australia) rate hike(s) in the near-term; and therefore also reduces the likelihood of pre-emptive cuts in 2024”, analysts at UBS wrote.
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