The start of a new bull run?

The S&P/ASX 200 index (Index: ^AXJO) (ASX: XJO) rose 1.1% yesterday to 4,330.2 led by the consumer staples sector — thanks to a 3.8% rise by Wesfarmers — and strong gains by the banks, as investors focused on local news, which was mostly positive.

The Australian dollar fell slightly against the greenback, and was buying 104.8 US cents at the close of trade yesterday.

Company News

Adelaide Brighton Ltd (ASX: ABC) saw its share price hammered down 10.8% after the company reported a 10% increase in half year profit to $67.5m. What the market didn’t appear to like was that the result was below expectations and the company’s weak outlook for the rest of the year. Adelaide Brighton forecast sales volumes to be fairly flat, and a full year profit after tax in the range of $145 to $155m.

Despite reporting a loss for the 2012 financial year of $14.4m, Matrix Composites and Engineering (ASX: MCE), an engineering firm focused on the oil and gas industry, saw its shares rise 5.4%. Investors were likely buoyed by the company’s outlook for a much improved 2013 financial year.

Electronics and fibre optic cabling products manufacturer, Legend Corporation (ASX: LGD) enjoyed a 6.5% pop after reporting an 18% increase in net profit to $9.4m for 2012.

The owner of Coles, Bunnings & Kmart amongst other businesses, Wesfarmers Limited (ASX: WES) saw its shares hit a 15-month high, after announcing an 11% increase in net profit for 2012, led by its Coles food, liquor and petrol division. Share in the conglomerate ended up 3.8%.

Meanwhile, insurance and wealth management group AMP Limited (ASX: AMP) saw its share rise 4.8% after reporting an 11% rise in net profit for the six months to June 2012, compared to the previous year.

Winners and losers

Apart from AMP and Wesfarmers, the big four banks also posted strong rises with Commonwealth Bank of Australia (ASX: CBA) the best, rising 1.8% to $57.05.

The biggest loser was Dexus Property Group (ASX: DXS), with its shares falling 2.5%, after the group reported a slump in net profit from $553m in 2011 down to $181m this financial year. Fellow property company GPT Group (ASX: GPT) lost 2.3%, likely dragged down by Dexus’ result.

The Foolish bottom line

With a lack of direction from international markets, investors appear to have focused on the performance of local companies yesterday. Several major companies reported results above expectations and confidence may be seeping back into the market.

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Motley Fool writer/analyst Mike King doesn’t own shares in any companies mentioned. 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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