Midday: ASX falls in last fiscal 2012 session

Market Reports

Negative offshore leads pushed the Australian share market into the red at open. Stocks have sunk lower in muted trade in the last session of the 2012 financial year as investors continue to await developments from the European Union leader’s summit.

The S&P/ASX 200 index has lost 8 points and is trading at 4,037. On the futures market the SPI is 15 points lower.

Company news

Shares in David Jones Limited (ASX:DJS) have surged after the department store retailer confirmed it’s received a takeover approach from an unnamed UK entity. DJs directors do not believe they have enough information to assess the value of any potential deal and have recommended shareholders treat related market commentary cautiously. Reports have been circulating for months that DJs is a prime takeover target for a private equity play eyeing the company’s property assets. Shares in David Jones have surged 14.6 per cent and are trading at $2.59.

Gold miners St. Barbara Limited (ASX:SBM) and Allied Gold Mining Plc (ASX:ALD) have outlined plans to merge in a deal worth about $556 million. St. Barbara has offered Allied Gold $1.025 in cash and 0.8 St Barbara shares for every Allied share held which if approved would see Allied Gold become a subsidiary of St Barbara and Allied Gold de-listed. Both companies believe the deal would create an international diversified gold mining and exploration company with a market value of about $1 billion. Shares in Allied Gold surged more than 60 per cent following the announcement while shares in St. Barbara have dropped 12.03 per cent and are trading at $1.86.

Best and worst performers

The best performing sector is Consumer Discretionary gaining 5 points to 1,226. Shares in David Jones Limited (ASX:DJS) have risen 14.6 per cent and trading at $2.59. Shares in Myer Holdings Limited (ASX:MYR) and Pacific Brands Limited (ASX:PBG) are also stronger.

The worst performing sector is Consumer Staples, falling 115 points to 7,633. Shares in Metcash Limited (ASX:MTS) have fallen 10.29 per cent, trading at $3.35. Shares in GrainCorp Limited (ASX:GNC) and Wesfarmers Limited (ASX:WES) are also lower.

Gold and the dollar

Gold is trading at $US1,555 an ounce.
The Australian dollar is buying $US1.004.