Market Wrap: Aus shares drift to flat finish

Market Reports

The Australian share market drifted between positive and negative territory throughout today, slightly recovering from earlier losses to end barely changed. Despite a healthy lead from Wall Street debt concerns in the Eurozone continue to weigh on sentiment, pushing the price of safe-haven asset gold to a record high of $US1600.
 
The S&P/ASX200 Index eased 2 points to close at 4,472. On the futures market, the SPI is up 6 points.

Economic news

Australian car sales increased in June, following two month of falls as the industry suffered from supply disruptions caused by Japan's earthquake. The Australian Bureau of Statistics reports new vehicle sales rose 1.3 per cent last month, but were still 11.5 per cent down from June 2010.
 
Company news

Shares in Sundance Resources Limited (ASX:SDL) soared more than 20 per cent, after receiving a $1.4 billion takeover offer from its largest shareholder, China’s Hanlong Mining. Africa-focused iron ore miner Sundance believes the offer undervalues the company and has recommended shareholders take no action. Sundance said last month that it had shortlisted potential partners to develop its Mbalam Iron Ore Project in central West Africa. Shares in Sundance Resources ended 22.5 per cent higher at $0.49.
 
Shares in Eastern Star Gas Limited (ASX:ESG) climbed more than 40 per cent after it backed an offer from Santos to acquire the 80 per cent of Eastern Star Gas it does not already own. Santos will buy most of the company’s coal seam gas permits for around $924 million, which will see it gain the biggest gas reserves in New South Wales. Following news of the friendly takeover bid shares in Santos Limited (ASX:STO) fell 4 per cent, closing at $12.70. Shares in Eastern Star Gas jumped 41.18 per cent, closing at $0.84.

Shares in News Corporation (ASX:NWS) have continued to fall, at one point hitting a low of $13.65, amid the phone hacking scandal that has already triggered arrests, investigations and the closure of its British tabloid News of the World.
 
Shares in fellow media company Austar United Communications Limited (ASX:AUN) also took a hit today, on fears the threat of increased regulation in the sector may hinder Foxtel’s $2 billion takeover bid for the regional pay-TV provider.
 
Investors responded well to Djerriwarrh Investments Limited (ASX:DJW) full year result. The investment company has almost doubled its net profit to $57 million in fiscal 2011.
 
Qantas Airways Limited (ASX:QAN) says it will pour around $470 million into expanding its Singapore hub, largely through adding more Airbus planes to its budget arm Jetstar.
 
Best and worst performers

The best performing sector was Health Care, adding 92 points to close at 8,485. The worst performing sector was Consumer Discretionary, losing 16 points to close at 1,269. The best performing stock in the S&P/ASX200 was Eastern Star Gas shares advanced 41.18 per cent to close at $0.84. Shares in Sundance Resources and Bow Energy also gained today. The worst performing stock was Australand Property Group, falling 4.27 per cent to close at $2.69. Shares in News Corporation and Austar United Communications also closed lower today.
 
Commodities

Gold is trading at $US1,597 an ounce. Light crude is down $0.15 cents at $US97.09 a barrel.