Market flat despite solid results, Greek bailout

THE sharemarket tracked sideways yesterday despite a string of solid earnings results and a deal being struck on a second Greek bailout.

By InvestSMART · 23 Feb 2012

By InvestSMART ·
23 Feb 2012

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THE sharemarket tracked sideways yesterday despite a string of solid earnings results and a deal being struck on a second Greek bailout.

The benchmark S&P/ASX200 index was up 1.9 points at 4,293.1, while the broader All Ordinaries index rose 3.9 points to 4372.1.

On the ASX 24, the March share price index futures contract was steady at 4273 points.

IG Markets strategist Stan Shamu said earnings results had driven the key indices towards a key resistance level of 4300 points.

Mr Shamu said the energy sector led the gains after the oil price jumped and Woodside Petroleum delivered a solid result.

Woodside's full-year profit fell by 4.3 per cent due to the cost of delays at its Pluto liquefied natural gas project. Stripping out non-recurring costs, the company's underlying profit was up 16.7 per cent at $1.56 billion. The shares closed up 91?, or 2.53 per cent, at $36.86.

Oil Search rose 24?, or 3.57 per cent, to $6.96 while Santos rose 19?, or 1.35 per cent, to $14.31.

Jobs website Seek posted a first-half profit of $60.6 million. Its shares rose 61? to $6.31.

Vaccines maker CSL reported a 3.4 per cent fall in net profit to $483 million but upgraded its full-year profit forecast. The shares rose 77?, or 2.49 per cent, to $31.74.

Suncorp said it would pass on more insurance premium rises to offset claims costs after Melbourne's Christmas Day hailstorms topped off the company's worst year for natural disasters. Its shares fell 18? to $8.25.

Shares in Ten Network tumbled to a two-year low after the free-to-air broadcaster forecast a steep drop in earnings and revenue. Ten was down 8? at 78?.

Broadcaster and newspaper publisher Seven West was up 26? at $3.79 after it said a 40 per cent share of the lucrative free-to-air metropolitan television advertising market was within reach.

BHP Billiton was down 3? at $36.41 and Rio Tinto was 63? lower at $68.53. The spot price of gold in Sydney was $US1756.25 ($1644) per fine ounce, up $US16.70. Gold miner Newcrest was up 75?, or 2.14 per cent, at $35.85 after it received conditional approval for a secondary listing on Canada's Toronto Stock Exchange.

Miner OneSteel was the biggest mover by volume, up 15.85 per cent at 95? after almost 88 million of the company's shares had changed hands. It was also the top performer on the S&P/ASX 100 index, a day after flagging a better second-half result and job cuts following a $74 million interim net loss.

Market turnover was 2.01 billion shares worth $4.93 billion.

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Frequently Asked Questions about this Article…

Why did the ASX market trade flat even after solid company results and a Greek bailout deal?

The ASX tracked sideways because gains from a string of solid earnings were balanced by mixed performances across sectors. IG Markets strategist Stan Shamu said earnings pushed key indices toward a resistance level around 4,300 points. At the same time a second Greek bailout deal provided background support but didn’t spark broad buying, leaving the S&P/ASX 200 essentially flat.

What drove the energy sector gains on the ASX and which oil and gas stocks performed well?

Energy stocks led the market after a jump in the oil price and strong results from major producers. Woodside Petroleum delivered a solid result, and other oil names also rose — Oil Search and Santos were higher on the day, reflecting the oil-price boost and investor interest in the sector.

What were the key takeaways from Woodside Petroleum’s results for investors?

Woodside’s full-year profit fell 4.3% due to costs from delays at its Pluto LNG project, but underlying profit (stripping out non-recurring costs) rose 16.7% to $1.56 billion. The market responded positively and Woodside shares closed higher at $36.86.

How did CSL’s earnings update affect its shares and outlook?

CSL reported a 3.4% fall in net profit to $483 million but upgraded its full-year profit forecast. The improved outlook helped lift investor sentiment and CSL shares rose to $31.74.

What did Seek report and how did the market react to its first-half profit?

Jobs website Seek posted a first-half profit of $60.6 million. The result was well received by the market and Seek’s shares rose to $6.31.

What impact did recent natural disasters have on insurance stocks like Suncorp?

Suncorp said it would pass on more insurance premium rises to help offset claims costs after Melbourne’s Christmas Day hailstorms capped a very bad year for natural disasters. The stock fell and Suncorp shares were quoted at $8.25 following the announcement.

How did free‑to‑air broadcasters Ten Network and Seven West fare in the market?

Ten Network tumbled to a two‑year low after forecasting a steep drop in earnings and revenue, while Seven West rose to $3.79 after saying a 40% share of the metropolitan free‑to‑air TV advertising market was within reach — showing divergent fortunes within the media sector.

What happened with miners, gold prices and heavy trading stocks on the day?

Major miners were mixed: BHP Billiton was lower and Rio Tinto fell, while Newcrest rose after receiving conditional approval for a secondary listing in Toronto. The spot gold price in Sydney was reported at US$1,756.25 per ounce (about $1,644). OneSteel was the biggest mover by volume, up strongly after nearly 88 million shares changed hands, reflecting heavy trading interest in that stock.