EBC Markets Briefing | Mining mega-deal set to rattle Australian market

The Australian stock market is close on Thursday for the Anzac Day holiday. The benchmark ASX 200 index has achieved five all-time highs so far but markedly underperformed its major peers.

CPI for Q1 in the country was 3.6% higher than a year previously, slowing less than expected. That stacks the odds against the RBA to cut interest rates in 2024 and thus poses more challenges to equities.

London-listed miner Anglo American said it had received an all-share buyout proposal from BHP Group, a deal that would make the world's biggest listed miner also the largest producer of copper globally.

The global mining industry has seen a slew of M&A as companies review their assets to raise exposure to metals deemed critical to the energy transition.

In many clear energy systems, there is 6 times more copper than in traditional systems, according to the International Copper Association. The metal rose to within a whisker of $10,000/mt due to signs of shortage.

BHP shares were down 10.5% this year as China’s weaker demand has weighed down iron ore, the primary source of revenue of the company, which might have led to the decision to look for a new growth pillar.

The ASX 200 rallied from solid support around 7,490 and broke above its 50 SMA. Before we see a spike to the 7,790 area, risks remain skewed towards the downside given prevailing fragile sentiment.

EBC Wealth Management Expertise Disclaimer: This material is for general information purposes only and is not intended as (and should not be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation byEBC Wealth Management Expertise or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.

#EBCFinancialGroup##EBCGroup##EBCGlobal#