The Australian share market has struggled for direction in early trade, while shares in Crown have surged on a takeover offer, leading gaming stocks higher.
The ASX 200 was flat at 6,708 points by 10:20am (AEDT).
The Australian dollar was weaker, buying around 77.3 US Cents
Crown shares leapt 18.7 per cent to $11.70, after the casino operator received an $8 billion takeover offer from US private equity giant Blackstone.
The offer was priced at $11.85 per share, a premium of more than 20 per cent on Crown’s Friday closing price.
The news sent shares in rival casino operator The Star Entertainment Group up 5 per cent, while Tabcorp (+1.9pc) and Aristocrat (+1.1pc) were also gaining ground.
Insurance stocks fell sharply as heavy rains cause flooding and property damage, with sever weather warnings in place for most of New South Wales.
Shares in IAG (-3.3pc), Suncorp (-3.2pc) and QBE (-2.2pc) were all lower.
Bank stocks drag on Wall Street
The moves on the local market follow a mixed finish for Wall Street on Friday.
The Nasdaq ended higher, lifted by Facebook and energy shares, while the Dow Jones Industrial Average lost 0.7 per cent and the S&P 500 ended slightly lower.
The S&P 500 banks index dropped after the US Federal Reserve said it would not extend a temporary capital buffer relief put in place to ease a pandemic-driven stress in the funding market.
“Banks have had such a significant up move this year and this news has only acted as a catalyst for profit taking,” National Securities chief market strategist Art Hogan told Reuters.
The measure, called the supplementary leverage ratio exemption, had been put in place during the pandemic, to ease stress on the funding market.
“The exemption effectively meant that banks could exclude [US Treasury bonds] UST and central bank deposits when measuring the size of their balance sheets used to estimate the minimum level of capital they are required to hold,” NAB strategist Rodrigo Catril wrote in a note.
Mr Catril said the lapsing of the exemption takes away an incentive for banks to hold US Treasuries, “so the concern is that the decision will exacerbate the current elevated level of volatility” in the bond market.
ABC/Reuters
Be the first to comment