ASX Market Wrap: Market ends flat after promising so much

Despite a strong start, the market just managed to avoid ending in the red

Mike King

Mike King is a Fool.com.au Investment Analyst and Writer. He caught the investing bug more than a decade ago, at a time when the U.S. had invaded Iraq and fear reigned in the markets. His initial success as the markets took off encouraged his passion and thirst for knowledge. With 13 years behind him at one of Australia's largest domestic banks, Mike's passion for stocks led him to join a boutique funds management firm, where he stayed for four years. A seven-year stint in equity research at one of the largest investment banks in the world followed that, giving Mike a thirst to pursue his passion further. Mike holds a Diploma in Applied Finance and Investment and a Graduate Certificate in Financial Planning. His passion is to help retail investors invest better, and that passion was one of his primary reasons for joining The Motley Fool Australia in late 2011. Mike has written thousands of articles since joining, including for Fairfax Media, Yahoo!7, Ninemsn and has also appeared on ABC's The Business. You can see all of Mikes' holdings here

Published June 28, 2012 6:24 pm AEST

The S&P / ASX 200 Index (Index: ^AXJO) (ASX: XJO) rose a paltry 0.04%, ending at 4,044.8, despite positive leads from US markets overnight.

The market started well, but then lost steam from around 11.30am, falling below yesterday's close, before making a final surge for the line and crossing it with a hair's breadth to spare.

The Australian dollar jumped above US$1.01, as investors bet against an RBA rate cut next week.

Company news

Metcash Limited (ASX: MTS) announced a capital raising of $325m, a plan to acquire 75% of Automotive Brands Group for $53.8m, and lowered its forecast profit to around $90m, down from previous forecast of around $136m. The stock is still in a trading halt, expected to resume trading tomorrow, the 29th June 2012.

News Corporation (ASX: NWS) was in the news with speculation over when and how the company will split itself in two, with the Wall Street Journal reporting that the board has approved the split. Shares in the company jumped 4%, its third consecutive day of rises.

TPG Telecom Limited (ASX: TPM) reported a net profit after tax of $56m for the first half of 2012, but also announced that it will cop a one-off $23m tax bill and $15m tax increase next financial year, due to changes in tax legislation. The market didn't like the news much, with TPG's shares closing down 1.7%.

Amcor Limited (ASX: AMC) announced that it had acquired packaging distributor Wayne Richardson Sales for an undisclosed sum, but expects the group to contribute sales of around $50m. Despite the positive news, Amcor shares fell 1.6% to $7.21.

Winners and losers

As ever, despite a flat market, we had some winners and some losers.

Santos Limited (ASX: STO) was down 5.3% to $10.45 on news that the company had boosted its budget for its Gladstone Liquefied Natural Gas (GLNG) project by US$2.5bn, bringing the capital expenditure forward from the post-2015 period. Santos's share of the increase, at 30%, is $750m, and the company advised that it could fund the expense from existing cash flows, without raising new capital.

Banks were mixed with Commonwealth Bank of Australia Limited (ASX: CBA) up 0.9% to $52.62, while National Australia Bank (ASX: NAB), Westpac Banking Corporation (ASX: WBC) and Australia and New Zealand Banking Group (ASX: ANZ) all finished in the red.

BHP Billiton Limited (ASX: BHP) and Rio Tinto Limited (ASX: RIO) both ended the day up.

Foolish takeaway

All eyes will be on any news coming out of the EU Summit starting today (tonight our time). As always short term movements tend to be the result of news that rarely matters in the long run. Keep your eyes on the long term price Fools!

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Motley Fool writer/analyst Mike King owns shares in BHP. The Motley Fool's purpose is to help the world invest, better. Take Stock is The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. Click here now to request your free subscription, whilst it's still available. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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