Evening Wrap: ASX 200 slips, Soul Patts and Brickworks surge on $14bn merger, Lithium stocks tumble

 The S&P/ASX 200 closed 20 points lower, down -0.24%. 

In a nutshell:

• Carl's away today (back tomorrow) – So I'm making a return to Evening Wraps

• The ASX 200 edged lower in a relatively uneventful session, where defensive sectors outperformed

• Washington H Soul Pattinson and Brickworks surged after announcing a long-awaited merger

Let's dive in.

ASX 200 Session Chart

The ASX 200 finished lower and near session lows (Source: Market Index)

Markets

The S&P/ASX 200 finished slightly lower, in a relatively uneventful session. Here are some of the session's key takeaways:

• The session had a defensive lean, with only Telcos (+0.40%), Industrials (+0.18%) and Staples (+0.14%) sectors closing higher.

• Energy stocks underperformed, with names Woodside (-1.1%) and Karoon (-1.8%) broadly lower. This follows OPEC+ announcing over the weekend plans to increase oil output by 411,000 barrels per day in July. Despite the increase, Brent crude prices rallied 2.5% to US$64.1 – perhaps this was already priced in and the market's moved on to other catalysts (e.g. Ukraine drone attack on Russia, Iran-US tensions).

• Materials was also relatively heavy, with heavyweights BHP (-1.1%), Fortescue (-2.3%) and Rio Tinto (-1.9%) broadly lower. Singapore iron ore futures fell 0.6% to US$95.8 a tonne.

• Gold miners had a solid session, with several names like Evolution (+3.0%), Regis Resources (+2.7%) and Ramelius Resources (+2.4%) rallying to fresh 52-week highs. Gold prices gained 1.5% to US$3,337 amid Trump's plans to double steel and aluminium tariffs and the above Russia, Iran tensions.

• Lithium stocks continued to spiral lower, with Pilbara Minerals down 8% to $1.14, the lowest since May 2021. Last Friday (unclear if after market close), UBS cut its EV demand forecasts and lowered its long-term spodumene price by 8% to US$1,200 a tonne. The investment bank downgraded PLS, IGO and Liontown from Neutral to Sell.

• Today's big story – Washington H Soul Pattinson and Brickworks are set to merge, creating a newly capitalised ASX-listed company. The two stocks finished the session up 16.4% and 27.5% respectively, as the market welcomed a clean capital structure (since SOL owns 43% of BKW and BKW owns 26% of SOL). The combined entity has an indicative market cap of ~$18bn, making it the 35-40th largest stock on the market. Its size (and potential index inclusions), improved liquidity and broader asset mix likely driven an immense level of institutional (funds, index trackers and ETFs) buying today. I wonder if this trend will continue tomorrow – it reminds me of how Sigma Healthcare traded during its Chemist Warehouse merger.

Economy

ANZ-Indeed Job Ads fell 1.2% month-on-month in May, following a downward revised 0.3% month-on-month decline in April. Here are the key takeaways from the report:

• "Although the ANZ-Indeed Australian Job Ads series has remained in a tight range of 114–117 over the last year, the May result is in the bottom of that range and marks the lowest level of job ads since March 2021," ANZ Economist, Aaron Luk said.

• "Other signals of labour demand are mixed. ANZ Job Ads per unemployed person has been gradually trending downwards since November last year (Figure 3). Employment rose 89,000 in April, but there has been volatility in the labour force survey data in recent months. Hours worked was flat in April and also declined in February and March."

• "The labour market still remains tight, with robust employment growth and a low unemployment rate. Given the overall resilience in the Australian economy, we maintain our expectation that the cash rate will be cut by 25 basis points in August and again in the first quarter of 2026."

Latest news

Interesting Movers

Trading higher

• +27.5% Brickworks (BKW) – Soul Patts merger

• +16.4% Washington H Soul Pattinson (SOL) – Brickworks merger

• +13.5% Resimac (RMC) – Special dividend announcement

• +4.5% Generation Development Group (GDG) – No news

• +4.4% Bluescope Steel (BSL) – Trump steel and aluminium tariffs

• Gold sector move – Meeka Metals (+6.0%), St Barbara (+4.5%), Ora Banda (+3.9%), Catalyst Metals (+3.8%), Evolution Mining (+3.0%), Regis Resources (+2.7%)

Trading lower

• -12.2% Clarity Pharma (CU6) – JPMorgan initiated Underweight

• -11.4% Syrah Resources (SYR) – No news

• -11.4% Lotus Resources (LOT) – JPMorgan initiated Underweight with 13 cent target

• -8.7% Appen (APX) – No news

• -6.1% Mesoblast (MSB) – No news

• -5.0% Domino's Pizza (DMP) – No news

• Lithium sector move – MinRes (-11.7%), Core Lithium (-11.1%), Winsome Resources (-9.6%), Liontown (-8.2%), Pilbara Minerals (-8.0%)

Broker Moves

Carl's the man – broker moves are on halt today.

Scans