Markets limp into the weekend – index up but hardly convicting – enjoy the weekend! (STO)
A day that saw most optimism in early trade before sellers got on top from around 10.30am onwards, hitting the mkt around -8pts in the match alone. The majority of the big names looked poor by the close and that sort of trading action, where early buying is met with profit taking suggests more weakness to come…As suggested in the AM report, and worth reiterating leading into the weekend, we think mkts go lower in the short term before setting up a good buying opportunity before the December strength. The 5850 level on the downside remains our preferred scenario.
Overall, the IT stocks did best, the likes of Seek and Webjet while most weakness was once again in the defensive, interest rate sensitive areas of the mkt – a range today of +/- 29 points, a high of 5978, a low of 5949 and a close of 5957, up 13pts or +0.23%.
ASX 200 Intra-Day Chart
ASX 200 Daily Chart
Santos (STO) – Obviously up strongly yesterday on the back of a reported takeover bid from Harbour Energy back in August at $4.55 a share, however the unofficial reports saying the deal could now be around $5.30 a share – the stock up another 6c / 1.21% today to close at $5.01 however it’s still a long way from the $5.30 muted price. At $5.30 though we think the board would still be reluctant to accept the deal + the cat is now out of the bag which makes it more difficult. Still, shows that value is being seen in the sector and the companies with some distress on their balance sheet + ripe for a recapitalisation are the ones in focus.
Santos (STO) Daily Chart
Have a great night
The Market Matters Team
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