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ASX Market Wrap: Few losers as the market gallops ahead

For the first time in a while, the Australian market finally followed the overseas leads with a strong gain today.

Our market finished last week flat in the face of a 1.5% gain on the Dow Jones (and more on the S&P 500 and Nasdaq). The US markets finished last week with gains – the Dow Jones and S&P 500 indices closing up 0.2%, and the Nasdaq finishing strongly, up 0.6%.

The Australian market managed to trump its US counterparts, with the S&P / ASX 200 (Index: ^AXJO) (ASX: XJO) and the All Ordinaries (Index: ^AORD) (ASX: XAO) both closing 0.8% higher to 4,396.6 and 4,467.2 points, respectively.

NAB profit higher

There was quite a bit of corporate news out today, led by National Australia Bank’s (ASX: NAB) earnings. Profits were up on the prior year, but somewhat less than bank shareholders are used to, growing by 5.7%. The bank is restructuring its UK operations, closing some branches and back offices as it seeks to put the UK division on sounder financial footing.

Shareholders seemed to be nonplussed by the result, with NAB shares underperforming the broader market just slightly. It was the weakest of the four big banks, however, with Commonwealth Bank (ASX: CBA), ANZ (ASX: ANZ) and Westpac (ASX: WBC) all seeing gains in excess of that of the NAB.

Takeover over

The long-term takeover stoush for Spotless Group (ASX: SPT) seems to have been settled, with the board agreeing to accept a takeover offer from Pacific Equity Partners, despite being a lower price than the board had previously demanded.

In more corporate moves, Ansell (ASX: ANN) today announced the purchase of Swedish industrial protection group Trelleborg, while struggling Kagara Mining (ASX: KZL) today appointed administrators, after being able to secure further funding, and after having sold its last operating mine last week.

Gaming business Tabcorp (ASX: TAH) announced it had successfully refinanced $450m of debt that was due in June 2013 to now mature in June 2015.

Media Convergence Review released

After bad news from Seven West Media (ASX: SWM) last week, the media industry are this afternoon digesting the federal government’s media Convergence Review. Some of the recommendations are considerably different to the current regime, and News Corp (ASX: NWS) has already given the thumbs down to the proposed complaints body. Time will tell what recommendations will be taken up, and how it will affect those companies or Southern Cross (ASX: SXL), Ten Network (ASX: TEN) and Fairfax (ASX: FXJ).

In the mining sector, Fortescue Metals’ (ASX: FMG) Andrew Forrest hit back at renowned hedge fund manager Jim Chanos who announced he was short Fortescue, but long BHP Billiton (ASX: BHP). Forrest invoked the competition, was reported in The Herald Sun as saying that Chanos’ was using Fortescue to be short China, while Fortescue, BHP and Rio Tinto (ASX: RIO) were positive on the country’s future demand for resources.

Rates decision tomorrow

Economic data – and expectations – were also the talk of the market. Despite a small increase in inflation, as measured by the TD Securities – Melbourne Institute survey, and private sector credit growth, the market is almost universally expected the RBA to cut the official cash rate by 25 basis points, with a few economists calling for a 50 basis point cut.

No-one wanted to miss out on gains today, with every sector of the ASX showing gains today. The increases were led by the Materials sector, up 1.4%, the Property (A-REIT) sector up 1.0% and the Telecomms sector up 0.9%. While all sectors went up, the weakest were the Healthcare sector, which was flat after rounding (up 1.4 points), Utilities, up 0.3% and Info Tech, up 0.4%.

Winners and losers

The ASX 200 constituents were mostly positive today, with over 70% of the companies in that index showing gains, while 22% were down on the day.

5 companies saw share price increases of more than 5%, led by Integra Mining (ASX: IGR), up 8.3%, Saracen Mineral (ASX: SAR) gaining 6.4%, Intrepid Mines (ASX IAU) picking up 5.5%, a win for the airlines with Virgin Australia (ASX: VAH) rising by 5.3% and Charter Hall (ASX: CHC) rounding out the top 5 with a 5.0% gain for the day.

At the other end of the spectrum, the 5 biggest losers all fell by 3.5% or more, with Imdex (ASX: IMD) down 5.3% as investors digested last week’s quarterly announcement, Dart Energy (ASX: DTE) falling 5.0%, JB Hi-Fi (ASX: JBH) continuing its downward trajectory, and Bathurst Resources (ASX: BTU) both off 3.8%, and Coalspur Mines (ASX: CPL) losing 3.5% during today’s trading.

Foolish take-away

While one day’s trading can seem like forever when you’re losing, and feel wonderful when your portfolio is gaining, it’s just one day. As Benjamin Graham would remind us:

“In the short run, the market is a voting machine, but in the long run it is a weighing machine.”

The ASX is already on the move in 2012, and Goldman Sachs experts recently said they reckon S&P/ASX 200 could top 5,000 next year. Read This Before The Coming Market Rally is a must-read for investors who don’t want to miss out on the party. Click here now to request your free copy, before it’s too late.

  Scott Phillips is an investment analyst with The Motley Fool. You can follow him on Twitter @TMFGilla . Take Stock is The Motley Fool Australia’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).

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