ASX Market Wrap: Markets up while David Jones crashes

British private equity firm withdraws bid for the upmarket retailer

a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The S&P / ASX 200 Index (Index: ^AXJO) (ASX: XJO) rose 0.9% to close at 4,133, following a 2% jump on Wall Street and a 1.2% jump on our markets on Friday. Most sectors of the market were up today, led by Energy and Gold, up 2% and 3.1% respectively. Consumer discretionary and health care sectors were the only ones bleeding red ink.

Newcrest Mining, Macquarie Group and Woodside Petroleum were the best performing stocks in the top 20, with all three rising by more than 2.5%.

In the biggest news of the day, EB Private Equity (EBPE) has withdrawn its bid for David Jones Limited (ASX:  DJS), citing recent publicity around its proposal had made it difficult to proceed. DJs shares subsequently plummeted 10% to close at $2.33. The question remains, is someone else likely to take a pop at the company in the near future?

Pacific Brands Limited (ASX: PBG) was up 1% to 50.5 cents, after  announcing that it had paid down $25m of its $175m debt, and extended the terms of the debt facility to July 2015. The clothing, footwear and bedding maker of iconic brands such as Bonds, KingGee, Rio and Sheridan has been struggling in the current tough retail environment. Paying off some of its debt is a good first step in a move to strengthen its balance sheet, should conditions continue or deteriorate further.

In a letter to shareholders today, Westpac Banking Corporation (ASX: WBC) advised that growth in the financial services sector is likely to remain modest in the medium term, as consumers reduce their debt levels  and increase savings, and businesses limit new investment (apart from the mining sector). The bank believes that these changing economic and business forces are structural in nature, and the company is being forced to adapt. That's not good news for bank shareholders, including those of the other big majors, Australian and New Zealand Banking Group (ASX: ANZ), Commonwealth Bank of Australia (ASX: CBA) and National Australia Bank (ASX: NAB).

Foolish takeaway

Takeover announcements can never be regarded as absolute certainties, and EBPE's withdrawal of its offer and today's fall in David Jones' shares perfectly illustrates that point. It's never a wise idea to invest purely on speculation – or hope – of a takeover.

If you're in the market for some high yielding ASX shares, look no further than our"Secure Your Future with 3 Rock-Solid Dividend Stocks" report. In this free report, we've put together our best ideas for investors who are looking for solid companies with high dividends and good growth potential. Click here now to find out the names of our three favourite income ideas. But hurry – the report is free for only a limited time.

More reading

Motley Fool writer/analyst Mike King owns shares in Woodside. 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.

More on ⏸️ Investing

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »

⏸️ Investing

Why Fox (NASDAQ:FOX) might hurt News Corp (ASX:NWS) shareholders

News Corporation (ASX: NWS) might be facing some existential threats from its American cousins over the riots on 6 January

Read more »