Many investors have been looking for a market correction after a fairly steady rise since the start of the year. On Thursday, the last day of trading before the Easter public holidays, they got what they wanted (or perhaps feared) with the S&P/ ASX 200 Index falling by 14 points to 4319.8, a drop of 0.3 per cent, after recovering from a 1 per cent fall at noon.
This followed on from a fall in the Dow Jones Index of 1 per cent, as job market fears rose thanks to a weak US employment report.
Amid the red ink, three stocks managed to stand out by falling by more than 6 per cent.
Macmahon Holdings Limited (ASX: MAH) fell by 6.7 per cent to 75 cents, continuing on from a 5 per cent fall from the day before. Perhaps there was some profit-taking in the stock, after the company’s share price had risen almost 40% since the beginning of the year. The mining services sector has been one of the market’s favourites in 2012, with many mining contractors and mining services firms seeing their prices rise handsomely.
Intrepid Mines Limited (ASX: IAU) also suffered a large fall of 6.5 per cent to 69.5cents, hitting a 52 week low of 67 cents at one stage. The gold miner and explorer has seen its share price fall off a cliff, after Indonesia changed its project ownership rules, requiring at least 51 per cent local equity by the 10th year of production. Intrepid has an 80 per cent interest in a large copper-gold mining project, Tujuh Bukit, in east Java. There appears to be a fair bit of confusion about how the rules will apply to this project, adding to investor uncertainty and therefore downward pressure on the share price.
Linc Energy Limited (ASX: LNC) fell 6 per cent, having seen its share price fall by over 60 per cent since July 2011. Linc is involved in coal exploration, and the development of coal-to-liquids processes through a combination of underground coal gasification (UCG) and gas-to-liquid (GTL) technologies, but has yet to produce a profit from them. Linc has also expanded into oil production, with the purchase of 13 oil producing fields and related infrastructure from ERG Resources in October 2011.
It looks like the market doesn’t have too much confidence in the viability of these new technologies.
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Motley Fool contributor Mike King doesn’t own shares in any companies mentioned. The Motley Fool’s purpose is to educate, amuse and enrich investors. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. Click here to be enlightened by The Motley Fool’s disclosure policy.
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