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3 ASX stocks dumped by the market

The S&P / ASX 200 Index (Index: ^AXJO) (ASX: XJO) has dropped 0.3%, to close at 4,448, after US markets closed flat on Friday. Experts believe that markets will see low trading volumes and increased volatility and/or weak markets until the US government sorts out its ‘fiscal cliff’ issues.

The Australian dollar is steady against the US dollar, currently buying 104.2 cents.

These three stocks were crunched, falling more than 6%.

Lynas Corporation Limited (ASX: LYC) dropped 10% to close at 72.5 cents, after completing a capital raising that was expected to raise up to $200 million. Institutions have so far committed $150 million, and retail shareholders will be offered the opportunity to kick in an additional $50 million. The issue was priced at 75 cents a share, and appears the most likely reason for the share price fall today.

QBE Insurance Group (ASX: QBE) fell 8.3%, ending at $11.80, after the company announced that losses due to Hurricane Sandy could hit US$450m, and the company cut its insurance profit margin forecast from more than 12% to around 8%. Despite the potential loss, the company still expects to report a net profit before amortisation of around US$1 billion, a 30% increase over 2011.

BlueScope Steel Limited (ASX: BSL) lost 6.3% to close at 45 cents, after the company announced that it had scrapped a previously planned offer of US$300m in corporate debt to institutional investors, due to volatility in US credit markets. BlueScope may now need to seek alternative funding to refinance existing long-term debt. Investors may be worried about a potential capital raising.

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Motley Fool writer/analyst Mike King owns shares in QBE Insurance. 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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