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Afterpay merger helps ASX record high

Steven DeareAAP
The ASX has shot to a record high following some big merger deals.
Camera IconThe ASX has shot to a record high following some big merger deals. Credit: AAP

A mega takeover deal for Afterpay ignited technology shares and helped the ASX to a record high level.

US payments provider Square tabled a $39 billion offer for the buy now, pay later provider and investors sent the latter's shares surging by 18.77 per cent to $114.80.

Afterpay investors will receive shares in Square on the New York Stock Exchange, rather than cash. The deal values each Afterpay share at $126.21.

The boon for the Aussie company caused technology shares to rise 6.54 per cent.

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Yet it was not just technology shares helping the ASX higher on Monday.

There were gains of more than one per cent for shares in financials, healthcare, energy, utilities and consumer stocks.

The ASX200 notched its highest level of 7506.3 points.

The benchmark S&P/ASX200 index closed higher by 98.8 points, or 1.34 per cent, to 7491.4.

The All Ordinaries closed up 96.3 points, or 1.26 per cent, to 7760.5.

The ASX performance defied a negative lead from Wall Street on Friday.

The downbeat mood in US markets was due in part to Amazon's second quarter sales not meeting expectations.

Most Asian markets also bucked the lead on Monday.

IG Markets analyst Kyle Rodda said while there was no clear catalyst, US senators' nearly $US1 trillion infrastructure bill was probably helping sentiment.

The bill was produced on the weekend and promises plenty of stimulus for builders of roads, bridges, waterworks and broadband.

US corporate earnings have also more than met investors' expectations and kept US indices near record highs.

In Australia, the Reserve Bank will meet on Tuesday to consider a changed economic environment since its last meeting.

Coronavirus lockdowns have affected much of the nation, and economists tip gross domestic product to fall for the September quarter.

A lockdown for southeast Queensland, ordered on Saturday, has been extended to this Sunday. The NSW lockdown remains until August 28.

On the ASX, Afterpay was not the only high-profile takeover deal making headlines.

Oil Search's board endorsed Santos' implied offer of $4.52 per share.

The combined company would be among the 20 largest oil and gas providers in the world.

Oil Search shares were higher by 4.72 per cent to $3.99.

Santos was better by 0.62 per cent to $6.49.

Building materials supplier Boral fell 4.18 per cent to $6.88.

The decline comes after Seven Group's off-market share offer closed last week.

Seven has taken a more than 69 per cent stake in Boral.

In mining, an iron ore price drop caused a slump in Fortescue shares.

Shares dropped 2.09 per cent to $24.39.

Rio Tinto was also lower and fell 0.14 per cent to $133.23.

BHP climbed 0.39 per cent to $53.70.

In banking, there were strong showings for each of the big four banks.

NAB was best of the group and higher by 2.39 per cent to $26.55.

The Commonwealth and Westpac were also higher by more than two per cent. ANZ rose 1.8 per cent.

The Australian dollar was buying 73.54 US cents at 1727 AEST, lower from 73.80 US cents at Friday's close.

ON THE ASX

* The benchmark S&P/ASX200 index closed higher by 98.8 points, or 1.34 per cent, to 7491.4 on Monday.

* The All Ordinaries closed up 96.3 points, or 1.26 per cent, to 7760.5.

* At 1727 AEST, the SPI200 futures index was higher by seven points, or 0.09 per cent, at 7393 points.

CURRENCY SNAPSHOT

One Australian dollar buys:

* 73.54 US cents, from 73.80 cents on Friday

* 80.70 Japanese yen, from 80.94 yen

* 61.89 Euro cents, from 62.10 cents

* 52.81 British pence, from 52.90 pence

* 105.42 NZ cents, from 105.47 cents.

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