Moderate Gains and "Buzzword Bingo" on the ASX

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Some days on the ASX market are quiet, with little corporate news from the major players. Other days, like today, offer a welter of information to process.

The S&P/ASX 200 (INDEX: ^AXJO  ) closed today at 4,362.7, up 0.3%-something of a victory, given the weak lead from the U.S. markets overnight.

For the record, we Fools think daily gyrations are more "noise" than anything -- it's hard to imagine the combined business prospects of the 200 businesses in the ASX 200 are exactly 0.3% better today after being 1.4% better the previous day and 0.3% worse off the day before that!

However, from time to time there is real news that helps investors understand the recent results, changes or continuations in company trends, and announcements that help clarify a likely future.

We saw two of the latter today, with Telstra (TLS.AX) updating the market on its capital management plans, and Commonwealth Bank (CBA.AX) providing a "strategy update."

Judging from the quotes and headlines over the past few days, the market was expecting something a little more exciting than Telstra announced.

The positive news was a forecast for increases in free cash flow in coming years, but a long-hoped-for capital management initiative (analyst-speak for a share buyback, increased dividend, or a one-off special dividend) wasn't forthcoming, with Telstra preferring to keep its hands on its cash -- for now.

Commonwealth Bank was a little more forthcoming in the news department, detailing planned cost-cutting and information technology initiatives in Australia, and further moves into both Indonesia and China -- the latest major bank to go searching for growth, while there's little to be found at home.

The rest of the market was something of a mixed bag, with the financials, IT, A-REIT, and utilities sectors showing losses in trading today, and consumer staples, telecoms -- thanks to Telstra -- health care, and materials leading the gains.

Shareholders in Whitehaven Coal (WHC.AX) will be able to breathe a sigh of relief despite the share price falling 9.1%, with a $0.50 dividend being responsible for all but $0.05 of today's share price fall. Mirabela Nickel (MBN.AX) shareholders weren't so lucky, with shares off 4.8% today, and retail-exposed companies (WTF.AX) and Billabong International (BBG.AX) were among the biggest losers.

The spoils were shared among shareholders of Intrepid Mines (IAU.AX), up 6.8%, FKP Property Group (FKP.AX), up 5.1%, Perseus Mining (PRU.AX), up 4.7%, and Discovery Metals (DML.AX), up 4.6%.

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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, while it's still available. This a rticle contains general investment advice only (under AFSL 400691).

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  • Report this Comment On April 20, 2012, at 10:04 PM, tretchikoff wrote:


    Wanted to post a comment on your article on Blackmores,but there was no comment link,so doing here-hope that's OK with you.

    As a long time investor in Blackmores since 1997 would like to inform you all that if you're an investor in Blackmores you get to buy their products at a discount of about 25%.Thus you save heaps on cost of suppliments as well as having a good growth stock that pays good divedents.



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