Banks, energy stocks help lift Australian shares

Australian shares ended higher on Monday, lifted by strength in financial and energy stocks, while a wave of takeover activity helped the benchmark extend gains for a second consecutive session.

The benchmark S&P/ASX 200 index closed 0.4% higher at 8,845.70 points, its highest level since September 9.

The index closed 1% higher on Friday.

Energy stocks climbed as much as 2.2% to their highest level since mid-September, led by a 6.4% jump in New Hope after the coal miner agreed to acquire unlisted Malabar Resources in a deal valued at about A$2.4 billion ($1.67 billion).

Shares of sector majors Santos and Woodside Energy rose 2.3% and 2.7%, respectively.

Financials advanced 0.9%, led by Challenger after the investment manager said it had received a takeover proposal from a unit of Japan’s Daiichi Life Holdings for the shares it does not already own.

The proposal valued Challenger at about A$7.94 billion, helping its shares surge 19.3% to end at an eight-year-high.

Shares of the ‘Big Four’ banks rose between 0.7% and 1.5%. Meanwhile, data on Thursday showed a surprise fall in August employment, which led the market to trim its expectations of a rate hike by the Reserve Bank of Australia in November, though a hike is still expected over the next few months.

“While lower rate expectations provide near-term support, valuation and net interest margin risks remain after the recent run, particularly if the next inflation data reintroduces the possibility of further tightening,” said Tim Waterer, chief market analyst at KCM Trade.

Among other takeover deals, Cleanaway Waste Management jumped 20.2%, after agreeing to an A$9.3 billion takeover by Swedish private equity group EQT.

FleetPartners surged 7.1% after agreeing to an A$1.13 billion buyout by Pacific Equity Partners-backed SG Fleet.

Capping gains, technology stocks lost 1.3%, mirroring weakness in US peers amid concerns that debt-laden AI infrastructure companies may not turn profits in time to repay their debts. New Zealand’s benchmark S&P/NZX 50 index fell 0.7% to 13,652.07 points.