Indices Hold Ground
The ASX 200 opened slightly lower, reflecting Wall Street’s subdued momentum overnight. At 10:15am AEST, the index dipped 2 points to 8,432. By mid-morning, it traded down 0.1%, standing at 8,427 points.
Mixed Sector Performance
Technology stocks and supermarkets performed strongly in early trading. The energy sector, healthcare, and major banks posted declines. CBA hovered near flat while Westpac dropped 1.4%. Miners delivered mixed results with Iluka outperforming in the mineral sands and rare earths segments.
Brickworks and Soul Patts Announce Merger
Washington H. Soul Pattinson rose 9%, while Brickworks surged 17.7% following merger news. Both companies decided to end their long-standing cross-ownership and merge into one $14 billion entity. Soul Patts owns 43% of Brickworks, while Brickworks holds 26% of Soul Patts. Soul Patts will offer Brickworks shareholders an implied value of $30.28 per share. This represents a 10.1% premium to Brickworks’ last closing price. Post-merger, Soul Patts shareholders will hold 72% of the new entity. Brickworks shareholders will retain 19%, with the remainder offered to new investors.
Investor Activism Acknowledged
Shareholder activist Stephen Mayne supported the merger. Mayne had pushed for simplification of the complex ownership structure over many years.
Retail and Supermarkets Trade Higher
Supermarkets outperformed discretionary retailers during early trading. Major chains showed strength against weaker consumer discretionary names.
Losers on the Board
Clarity Pharmaceuticals fell 6.7% as it continued recent declines. Liontown Resources dropped 4.1% after a negative broker note.
Bluescope Rallies on US Tariff News
Bluescope shares jumped 6.5% in early trade. The move came after Donald Trump announced steel tariffs would rise from 25% to 50%. The increase takes effect on 4 June. Bluescope operates major facilities in North America and employs over 4,000 workers there. Despite lacking an Australian exemption, Bluescope expects a net gain from the tariff change. The stock traded at $24.22 after the rally.
Trade Tensions Escalate
China warned of “forceful measures” to protect its interests amid renewed US trade actions. A Ministry of Commerce official stated China would defend its rights if the US “continues to undermine China’s interests”. US President Donald Trump had earlier accused China of breaching a trade agreement reached in May. He claimed on Truth Social that “China… HAS TOTALLY VIOLATED ITS AGREEMENT WITH US.” Trump later posted that he would talk with Chinese President Xi Jinping to resolve the matter.
China Defends Position
The Global Times quoted a Ministry of Commerce official who blamed the US for renewed trade tensions. The official said China acted in line with the Geneva deal signed on 12 May. China claimed it cancelled or suspended reciprocal tariffs as part of the agreement.
Manufacturing Growth Continues
Australia’s manufacturing sector expanded in May, marking its fifth month of growth. S&P Global’s Manufacturing PMI fell slightly to 51.0 from 51.1 in April. The index remains above the 50.0 threshold, indicating ongoing expansion.
Rio Tinto Signs Landmark Agreement
Rio Tinto reached a new agreement with the PKKP Aboriginal Corporation. The deal follows the destruction of the Juukan Gorge rock shelter five years ago. The site was the only inland location with 46,000 years of continuous human occupation. The agreement gives the Puutu Kunti Kurrama and Pinikura peoples more influence over Rio’s operations. It covers all Rio Tinto iron ore operations on PKKP lands in the Pilbara. Rio Tinto said the agreement ensures “knowledge-sharing and joint design is at the centre” of operations.
PKKP Leader Welcomes Agreement
PKKP chief executive Grant Wilson said the deal was both groundbreaking and innovative. The Juukan Gorge site lies near Rio’s Tom Price iron ore mine. The company had previously faced significant criticism after destroying the culturally significant site.
Market Summary
The ASX 200 stayed largely unchanged despite sector divergence. Mining, energy, and healthcare underperformed. Tech and consumer staples saw upward momentum. Mergers and tariff news reshaped trading sentiment during the session.
