Local market off to a strong start; ACCC blocks NAB bid for AXA once again
The Australian share market was off to a strong start today on the back of positive lead from Wall Street overnight. Investors seem to welcome the easing of concerns that pulled the European markets down early on the week.
The Materials and Utilities sectors were the leaders in pulling the market higher in early trade today.
Investment house Macquarie Group's shares rebounded from its yearly lows, which is most likely a technical rebound and was riding on the overall strength of the market today.
Competition regulator ACCC has blocked the National Australia Bank's (NAB) bid for AXA for the second time, which added to market speculation that NAB will not need any capital raising if it decides to walk away from the deal.
NAB investors seem to like the idea of the bid being blocked and pushed NAB shares 3% higher after the decision was announced. On the other hand, AXA shares dropped 8% on the news.
The Aussie dollar climbed against US dollar overnight to its one month high largely boosted by buying power from AUDJPY crosses as world equity market strengthened. Aussie dollar jumped after the stronger than expected employment data in August and lower unemployment (5.1% versus 5.2% market expected).
Today's employment data has further confirmed that the Australian economy is in a stronger position. The strong economic fundamental support has further confirmed recent upwards trading trends in Aussie dollar. The AUD/USD is trading towards 93 US cents after it broke its previous high of 0.9220 in early August.