Aussie shares edge up as Rio seals $10b lithium deal

The local bourse has finished slightly higher, but the day's real highlight is a blockbuster acquisition announced just after the market closed.

Rio Tinto said late on Wednesday afternoon it had agreed to pay $9.9 billion for US-based, ASX-listed lithium giant Arcadium in an all-cash transaction at a 90 per cent premium.

The deal was a significant step forward in the company's long-term strategy that would create a worth-class lithium business alongside its aluminium and copper operations to supply materials needed for the energy transition, chief executive Jakob Stausholm said.

The benchmark S&P/ASX200 index, which had been up by as many as 49.8 points around midday, closed Wednesday 10.5 points higher at 8,187.4 for a gain of 0.13 per cent.

The broader All Ordinaries rose 13.1 points, or 0.16 per cent, to 8,456.8.

Across the ditch, the Reserve Bank of New Zealand cut interest rates by half a percentage point as expected, taking Kiwi rates from 5.25 to 4.75 per cent.

Investors were looking ahead to US earnings season and there was a good backdrop for markets to move higher despite the stormy clouds, Moomoo market strategist Jessica Amir said.

Eight of the ASX's 11 sectors finished higher, with property, energy and materials lower.

Energy was the biggest loser, dropping 2.5 per cent after oil prices overnight dipped down to a six-day low of $US77 a barrel amid a build-up of inventories.

Brent crude had hit a six-week high of $US81 a barrel on Monday on fears of all-out war in the Middle East, but while fighting was continuing in Lebanon the conflict has not yet spun completely out of control.

Woodside dropped 3.0 per cent to $25.56, Santos slid 1.8 per cent to $7.12 and Ampol retreated 3.0 per cent to $30.06.

In the heavyweight mining sector, Rio Tinto fell 2.3 per cent to $118.24 in trading before its acquisition was announced.

Arcadium fell 0.5 per cent to $5.91. Rio has agreed to pay $US5.85 ($8.66) per Arcadium share, which Arcadium CEO Paul Graves called a compelling cash offer that reflected a full and fair long-term value for the business.

BHP dipped 1.2 per cent to $43.28, Fortescue retreated 1.6 per cent to $18.97 and South32 fell 1.9 per cent to $3.53.

In the telecommunications sector, REA Group climbed 2.1 per cent to a six-week high of $216.50 as the realestate.com.au owner held its annual general meeting.

REA chief executive Owen Wilson told shareholders that last month had been the company's best September for Australian listings in nine years, and properties were still selling despite the increased supply, showing robust demand.

In the heavyweight financial sector, all of the big banks finished higher. CBA and NAB both rose 0.5 per cent, to $135.63 and $37.46, while ANZ and Westpac both advanced 0.5 per cent, to $30.23 and $31.02, respectively.

Buy now, pay later company Zip was the best performer in the ASX200, advancing 6.3 per cent to a two-and-a-half-year high of $2.89.

Pipeline operator APA Group rose 2.6 per cent to $7.59 after the Australian Energy Regulator made a draft decision to maintain the existing light regulation regime on APA's South West Queensland Pipeline, rather than impose full price regulation.

The Australian dollar was buying 67.41 US cents, from 67.25 US cents at Tuesday's ASX close.

ON THE ASX:

* The benchmark S&P/ASX200 index finished Wednesday up 10.5 points, or 0.13 per cent, at 8,187.4

* The All Ordinaries gained 13.1 points, or 0.16 per cent, at 8,456.8

CURRENCY SNAPSHOT:

One Australian dollar buys:

* 67.39 US cents, from 67.25 US cents at Tuesday's ASX close

* 100.09 Japanese yen, from 99.53 yen

* 61.44 euro cents, from 61.23 euro cents

* 51.49 British pence, from 51.39 pence

* 110.53 NZ cents, from 109.93 NZ cents