ASX falls as energy stocks sell off; Santos plunges 12pc

The Australian sharemarket fell on Thursday, in line with a weak lead from Wall Street, as oil stocks were sold off on news that a $36 billion takeover bid for Santos had collapsed.

The benchmark S&P/ASX 200 Index fell 0.8 per cent, or by 73.3 points, to 8745.2, dragged lower by a 5.9 per cent fall in the energy sector at the closing bell. The All Ordinaries fell 0.7 per cent.

Ten out of the 11 sectors were in the red after chopping trading on Wall Street overnight as investors shrugged off the Federal Reserve’s first interest rate cut for 2025. Bond traders had been hoping for a more aggressive stance on rate cuts from the US central bank.

Recent gains wiped

For the ASX, Santos dominated the price action, tumbling 11.9 per cent to $6.74 after Abu Dhabi National Oil Co walked away from its takeover offer for Australia’s second-largest oil and gas producer.

Broker Jarden swiftly downgraded the stock to “underweight” from “overweight” on the news with other stocks in the sector also dragged lower. Woodside Energy dropped 6.3 per cent to $23.06, Beach Energy lost 4.5 per cent to $1.16 and Karoon Energy was down 3.5 per cent to $1.64.

IG analyst Tony Sycamore said the sharp self off had erased a “significant portion of the gains the sector had made over the previous four months”.

Weaker oil prices also weighed as traders weighed the Fed’s rate cut and an increase in US fuel inventories. Brent fell below $US68 a barrel while West Texas Intermediate was close to $US64.

ASX-listed stocks with US exposure were also sold after the Fed took a more cautious approach to future rate cuts. Transurban declined 2.3 per cent to $14.14, Brambles fell 1.6 per cent to $24.50, James Hardie 2.7 per cent to $24.50 and Ramsay Healthcare 1.9 per cent to $32.95.

The major banks recorded a mixed result, with index heavyweight Commonwealth Bank dropping 2.3 per cent to $164.33, National Australia Bank fell 0.1 per cent to $43.36, $3.67 slipped 0.1 per cent to $32.86 and Westpac edged up 0.1 per cent to $38.68.

Stocks in focus

Property stocks had a muted reaction to Thursday’s local employment report which showed an unexpected decline of 5400 jobs in August. Economists said the weak data would not force the Reserve Bank of Australia into cutting interest rates later this month. Goodman shares fell 0.5 per cent to $33.93.

In corporate news, Macquarie reportedly held takeover talks with private equity giant Carlyle Group before the discussions fizzled out. On Thursday, Carlyle’s share price continued to rise from the revelations which was first reported by US outlet Semafor. Macquarie dipped 0.1 per cent to $223.42.

And Endeavour has appointed Woolworths executive Jeanette Fenske to head its BWS liquor chain, succeeding outgoing managing director Scott Davidson. Shares were down 0.6 per cent to $3.67.

That’s a wrap on today’s news. Join us again soon for more live markets news.