ASX Gains, Led by Banks and Technology, Amid Global Tensions

Highlights

• ASX edged up 0.5% with banks and technology leading gains.
• Arcadium Lithium surged 44% after Rio Tinto takeover talks.
• Pro Medicus secured a significant contract renewal.

The ASX rose by more than 0.5% by midday on Monday, driven by strong performances in the banking and technology sectors. However, market participants remained cautious due to growing concerns over escalating conflicts in the Middle East and their potential impact on global oil supplies. 

Out of the 11 sectors, seven experienced gains, with financial and tech stocks leading the upward trend. Energy stocks, on the other hand, slipped as oil prices eased following last week's 10% rally. 

Arcadium Lithium Shines After Rio Tinto's Takeover Talks 

One of the standout performers on the ASX was Arcadium Lithium (ASX:LTM), which surged 44%. The rise came after Rio Tinto (ASX:RIO) confirmed it was in discussions to potentially acquire the company. This marks Arcadium’s largest one-day gain since its creation in January, following the merger of Allkem and Livent. Despite Arcadium’s rise, Rio Tinto shares dipped by 1%. 

Arcadium is one of the few companies utilizing direct lithium extraction (DLE) at its El Fenix site in Argentina. The news of a potential takeover has been circulating for some time, and this confirmation from Rio Tinto has brought the speculation to the forefront. 

Mining and Energy Sector Movements 

BHP (ASX:BHP) and Fortescue (ASX:FMG) also posted gains, supported by a 2% increase in iron ore futures in Singapore. The uptick in iron ore followed the reopening of China's markets after a week-long holiday. 

In contrast, energy stocks struggled as oil prices declined, reflecting a pullback from last week’s rally. The oil market has been volatile amid concerns about disruptions in supply due to global geopolitical issues. 

Nickel Price Forecast Downgrade 

In other mining news, BMI, part of Fitch Solutions, lowered its forecast for nickel prices in 2024. The revised outlook reduced the expected price from US$18,000 to US$17,300 per tonne, citing a significant surplus in the market driven by increased production from Indonesia and China. 

Pro Medicus (ASX:PME) Secures Major Contract Renewal 

Pro Medicus saw its shares rise by 2% after announcing an 8-year contract renewal worth at least $98 million with Mercy Health. The renewed agreement includes the Visage 7 Viewer and Open Archive products, with higher transaction fees, marking a significant milestone for the company. 

Global markets also saw notable movements, with US stocks gaining following a stronger-than-expected jobs report. The S&P 500, Dow Jones, and Nasdaq all posted gains, driven by the robust health of the US labor market. Meanwhile, Boeing and Tesla were among the big movers in the US, with Boeing up 3% after a successful rocket launch and Tesla gearing up to unveil its robotaxi concept vehicle.