Shares Down After A Day On The Skids

The Age

Wednesday November 20, 1996

JUSTINE TRUEMAN and VICTORIA TAIT

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, which had risen for 10 straight consecutive sessions, eight of them to records, took a breather on Monday night, falling 1.1 points to 6346.9.

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

Brokers said falls in the nickel price, down $US333 to $US6685 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 Ords, lost 23 cents to $7.55.

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

Brokers said that, despite a rise of 5.10 US cents in the copper price to $US1.06 a pound in New York, late selling of the metal indices in New York and Toronto on Monday night, and a weaker oil price, might have hurt BHP.

Major industrials also took a hit. News Corp, still suffering from fears about profit growth, slipped seven cents to $6.69.

Coca-Cola Amatil fell a further 40 cents to $15.10 after hitting a $14.95 low earlier on.

Helix Resources, which released promising drilling results from its prospect in SA's Gawler Craton on Monday, rose a further 27 cents to $1.10, up from 45 cents on Friday.

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

Meanwhile, bonds strengthened after the market swiftly absorbed the Government's sale of $600 million worth of bonds, erasing fears of an oversupply and sending yields edging nearer to three-year lows. The yield on 10-year bonds fell six basis points to 7.09 per cent.

The Australian dollar rose 0.23 US cents to 79.39 US cents. It has risen one US cent from its 78.37 finish two weeks ago, reversing declines triggered by the US currency's meltdown against the yen.