All Ords Singing The Wall St Blues

Sydney Morning Herald

Wednesday November 20, 1996

By JUSTINE TRUEMAN

Commodity price falls and a drop on Wall Street for the first time in 10 days were enough to unnerve investors on the sharemarket yesterday.

The All Ordinaries index closed on its lows, down 17.8 points at 2366 after sliding for most of the day amid a distinct lack of buying.

The market had opened weaker after the Dow Jones index in New York - which has risen for 10 consecutive sessions, eight of them to records - took a breather on Monday night, falling 1.1 points to 6346.9.

Gains in computer giant IBM, which surged to a nine-year high, were offset by a slump in oil company Texaco.

Brokers said falls in the nickel price, down $US333 to $US6,685 a tonne on the London Metal Exchange, and gold bullion, down $US1.40 to $US379.40 an ounce, hit metal stocks, particularly WMC.

The miner, which makes up 2.5 per cent of the All Ordinaries, lost 23c to $7.55.

Even BHP, which had been fairly resilient most of the morning due to higher copper prices, lost ground in late trade and slumped 24c to $17.60. CRA fell 14c to $19.46.

Brokers said that, despite the US5.10c rise in copper to US$1.06 a pound in New York, late selling of the metal indices in New York and Toronto on Monday night, and a weaker oil price, may have hurt BHP.

Major industrials also took a hit. News Corp, still suffering from fears about its earnings growth, slipped 7c to $6.69.

Coca-Cola Amatil fell a further 40c to $15.10 and went as low as $14.95.

"I think Coke caught people by surprise ... it's very hard to value growth stocks and when they disappoint it is immediately reflected in the market," said Mr Stephen Daly of County NatWest Asset Management.

Amatil's warning that profits would be flat this year and speculation about a price war with Pepsi in Eastern Europe also affected Lion Nathan, which distributes Pepsi in Australia. Lion fell 3c to $3.32.

Mr Joe Gutnick's roadshow overseas has been helping the prices of some of his companies. Astro Mining rose 97c to $7.82, Centaur was up 2c to $1.97 and Quantum Resources was queried by the stock exchange after it jumped 30c to $4.50. Quantum recently put former prime minister Mr Bob Hawke on the board. The main Gutnick company, Great Central Mines, was steady at $3.85.

BZW/Mirvac Property Trust was well traded with 10.12 million units through after stockbroker James Capel specialled 10 million in two lines at $1.25 each, the units' closing price. Sources said the parcel had been around for a while but was not thought to be part of BZW's 9 per cent stake.

At the smaller end, Helix Resources - which released promising drilling results from its prospect in SA's Gawler Craton on Monday - rose a further 27c to $1.10, up from 45c on Friday. Nearby prospector Equinox Resources rose 3c to 49c.

Simsmetal fell 15c to $6.65 after stockbroker First Pacific cut its 1997 profit forecast from $50 million to $32 million on weaker scrap metal prices.