The S&P / ASX 200 Index (Index: ^AXJO) (ASX: XJO) has fallen more than 2%, to close at 4,760, wiping more than $30 billion off the market. That follows slides in US markets overnight, after the US Federal Reserve stated that it was planning to taper off quantitative easing, with a view to ending the program by mid-2014. Investors were clearly spooked by the comments, selling down most stocks.
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MacMahon Holdings (ASX:MAH) dropped 20% to close at 10 cents, as 46 million shares in the company changed hands. Macmahon, a contract mining and construction company, has seen its shares fall more than 80% in the past year as mining companies cut costs, cancel projects and delay others. Macmahon has already downgraded its profits, but it seems each new day brings another downgrade by another mining services company, affecting the whole industry. It's not a sector for the faint hearted.
New NewsCorp Inc (ASX:NNC) jumped 15% to end at $16.75. The publishing business split off from the TV, movie and cable programming assets saw a big rise in its share price, ahead of the full demerger on June 28. With a declining publishing business, offset by a 50% share in Foxtel and a 60% share of the listed REA business amongst others, New News corp faces earnings headwinds. A substantial cash balance of around US$2 billion and being debt free helps, although some of those funds are already allocated to a share buyback plan.
QBE Insurance Group (ASX:QBE) climbed 5.1%, closing at $16.17. QBE has suffered over the past few years, with US government bonds paying pitiful returns, and with a high Aussie dollar buffeting its earnings. QBE invests much of its customers premiums and shareholder funds in low-risk assets, such as US government bonds. With the dollar falling, the US economy recovering and expectations that bond yields will soon rise, QBE looks set to reap the benefits through increased earnings.
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Motley Fool writer/analyst Mike King owns shares in QBE.
