Australian shares edged up to end the day in positive territory with Westfield soaring after news of a massive takeover offer for the property giant.
The benchmark S&P/ASX 200 index lifted 8 points, or 0.1 per cent, to 6021 while the broader All Ordinaries index advanced 9 points, or 0.1 per cent, to 6103.
Overnight positivity in the US markets set the stage for gains in Australia on Wednesday after the S&P 500 and the Dow Industrials registered fresh record closing highs as investors eyed a potential cut in US corporate taxes and continued economic growth.
The Australian dollar traded off recent lows at US75.72?? after consumer sentiment jumped to its highest in four years in December.
NAB strategists also noted talk about future flows related to the $32 billion takeover offer for Westfield from Unibail-Rodamco also helped the currency to lift off six-month lows.
Westfield shares shot up 13.7 per cent to end the day at $9.66 after news of what is expected to be one of the biggest takeovers of an Australian company on record.
Some fund managers expressed regret that the company will leave the ASX in its current form.
"It's been wonderful to have access to different growth drivers outside of those in Australia," Marco Lo Blanco, investment manager at Aberdeen Standard Investments said.
"Westfield is an ASX top 20 company and is very widely held. It's a sad day for the Australian market to lose such a quality company."
"It's been wonderful to have access to different growth drivers outside of those in Australia," he said. "It will be harder to get exposure to offshore companies in the ASX."
Several companies with significant offshore exposure were gaining ground on Wednesday, with CSL up 0.7 per cent and Treasury Wine Estates up 1.6 per cent.
Consumer staples were the best performers by sector, with Wesfarmers gaining 0.9 per cent and Woolworths up 0.5 per cent. Industrials also performed well, with Cleanaway surging 8.4 per cent, BlueScope Steel up 1.8 per cent and Sydney Airport higher by 0.8 per cent.
Fortescue Metals jumped 3 per cent to $4.84 on Wednesday, making it one of the stronger performers on the ASX. UBS released a note upgrading the iron ore miner to "buy" with a $5.30 price target.
Iron Mountain fell 6.6 per cent after it said it would buy the US operations of IO Data Centers for about $US1.32 billion along with a private placement of $825 million of its senior unsecured notes due 2028.
P2P Transport made a modest debut on the ASX on Wednesday, with opening trades at $1.44, compared with an issue price of $1.32. It ended the session back at $1.32.
Stock Watch: AuMake
Shares in the Daigou supplier AuMake fell 3.5 per cent to 70?? on Wednesday. The company announced a $20 million capital raising for existing shareholders to expand the number of stores the company has to at least twenty across Australia. The Sydney-based company is in a period of rapid growth as it acquires other health product businesses and capitalises on the trend of Chinese nationals buying Australian products and bringing them back to China. About 1.2 million Chinese visited Australia in 2016, spending an estimated $9.2 billion. AuMake has recently acquired Health Essence, a health supplements business, and Jumbuck, a wool manufacturer. The raising is via fully underwritten pro-rata, non-renounceable 2-for-15 entitlement offer at a price of 63?? per ordinary share. Shares in AuMake began trading on the ASX in October, tripling on their first day.
Gold
Gold prices retreated to a near five-month low as investors brace for a widely expected US interest rate increase this week and look for clues about further rises from the Federal Reserve. Spot gold fell 0.1 per cent to $US1240.64 an ounce, after hitting its lowest since July 20 at $US1235.92. Global markets are watching the US central bank's two-day meeting for clues about the Fed's future rate path. "The rise is already in the price so it's more about the outlook the Fed gives," said ABN Amro commodity strategist Georgette Boele. Gold is highly sensitive to rising US interest rates as these increase the opportunity cost of holding non-yielding bullion and boost the dollar, in which it is priced.
Aussie dollar
The local currency remained well supported throughout Wednesday ahead of the US Federal Reserve's meeting, despite a firm US dollar as well. Copper, iron ore and steel rebar were all higher as well, which prevented the Aussie dropping against the greenback. A bump in consumer confidence was good for the currency while the RBA's Philip Lowe and Kent steered clear of any dovish language, which allowed Australian two-year bonds to extend their six-week highs. The Aussie was fetching US75.72?? in late trade.
Oil
Oil prices rose on Wednesday as industry data showed a larger-than-expected drawdown in US crude stockpiles. Brent crude was up 60 cents to $63.94 a barrel. It had settled down after a wave of profit-taking after news of a key North Sea pipeline shutdown helped send the global benchmark above $US65 for the first time since mid-2015. After settlement on Tuesday, industry group the American Petroleum Institute said crude stocks in the United States fell by 7.4 million barrels last week. That is almost twice the decline of analysts' expectations for a decline of 3.8 million barrels.
Consumer Sentiment
Consumer sentiment has jumped to its highest in four years in December, a potentially timely boost to spending intentions at the busiest time of the seasonal shopping calendar. The survey of 1200 people by the Melbourne Institute and Westpac Bank published on Wednesday reported consumer sentiment rose 3.6 per cent in December, from November when it dipped 1.7 per cent. The index was up 6.1 per cent on December last year at 103.3, meaning optimists now outnumbered pessimists.
