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James Hardie shares fall on AZEK's $8.75 billion purchase

James Hardie shares fall on AZEK's $8.75 billion purchase

Finances reach two-week high

James Hardie's worst session for nearly a full year

Losses from miners and consumers

By Roushni Nair

March 24, 2019 - Australian shares finished flat on Monday, as gains in financials countered losses in mining. Meanwhile, building materials company James Hardie fell after it announced its agreement to purchase U.S. artificial flooring maker AZEK at $8.75 billion.

The benchmark S&P/ASX 200 Index edged up by 0.07% to 7,936.9 point.

Financials rose by over 1% to their highest level for two weeks. The 'Big Four" banks increased between 0.5% to 2.5%.

Henry Jennings is a senior analyst with Marcustoday Financial Newsletter. He said that banking stocks are resilient because defensive plays are largely immune to U.S. Tariffs. Market participants are now focusing on the budget implications.

BHP, the heavyweight in mining, declined 0.6%.

Grady Wulff is a market analyst with Bell Direct. He said that China's recovery from the pandemic shows mixed signals. Industrial output and retail sales improved last week but property sector weakness continues depressing steel and iron ore prices.

Woolworths, Coles, and other top supermarkets all saw their shares fall by 1.7%.

Investors rushed to lock in profits after last week's rally. The rally was triggered following a regulatory probe that cleared supermarket chains of allegations of price gouging.

Investors were scared off by the AZEK acquisition's steep premium and higher earnings multiple. The stock had its worst day since May 21, 2020.

The focus of attention is now on the U.S. Trade Policy as the White House prepares for the April 2 unveiling of a package containing reciprocal tariffs that will target multiple countries.

Australia's budget will be in deficit as of Tuesday, after two years with rare surpluses. Prime Minister Anthony Albanese is implementing household relief measures ahead of the May elections.

Wednesday, investors will also be waiting for inflation figures for February. Economists expect an increase of 2.5% in the year-over-year rate.

The benchmark S&P/NZX 50 Index in New Zealand rose by a marginal 0.1% to 12,128,2 points. Reporting by Roushni Nair in Bengaluru, editing by Sonia Cheema

(source: Reuters)