Late Rebound Fails To Recoup Early Losses

Sydney Morning Herald

Tuesday April 30, 1996

By JUSTINE TRUEMAN and wire services

Investors took their profits and the sharemarket took a few steps down yesterday, with a late rebound failing to cancel the earlier falls.

The All Ordinaries index had begun the day poorly with weaker commodity prices and a marginally higher Wall Street, and finished 3.2 points lower at 2316.8.

Late buying on the last day of the month helped to improve stocks such as Rothmans, up 10c to $6.18 when more than 5,000 shares changed hands in the last five minutes of trade.

On the futures market, the June SPI was a pessimistic 10 points down at 2333, the premium further contracting to around 15 points.

In New York, the Dow Jones closed 5.4 points higher at 5573.4 ahead of critical economic figures out this week.

Banks finished 1 per cent weaker after Australian bonds weakened following nervousness in US bond markets.

ANZ was hit the worst, down 12c to $6.08 while Bank of Melbourne fell 10c to $7.20 and Westpac came off 9c to $6.18.

Monday's warning by David Jones that it was unlikely to meet its prospectus forecasts for the current year had been anticipated by a number of analysts but brokers said the official statement was not good for market sentiment and DJs fell a further 1 per cent or 2c to $1.91 yesterday.

But Mayne Nickless rose 11c to $7.63 on good turnover.

Brokers said analysts were reassessing whether the company's Optus investment was worth more than the market had valued it.

MIM was busily traded as well up with 5.2 million shares changing hands as the stock fell 2c to $1.88.

Local institutions are allegedly switching from resource stocks, such as WMC, Comalco and Savage, which have done very well this month to the underperforming miner despite a falling copper price.

Meanwhile, there were further downgrades on WMC but the stock was just 1c lower to $9.28.

AAP reports that the Australian dollar closed slightly weaker yesterday because of a lower US dollar and a softer gold price.

Australian bonds also closed weaker as US treasury prices fell amid nervousness about this week's economic news.

A Macquarie Bank foreign exchange dealer said the domestic currency was dragged lower by the US dollar, which dropped sharply against the mark and the yen in late Asian trading.

The local unit finished at US78.64c from US78.70c at the close of trading on Monday.

The US dollar was slammed lower by American investment houses and European funds concerned about the possibility of a rise in Japanese interest rates.

The greenback closed at 104.18 yen from 105.07 and 1.5236 marks from 1.5255.

The gold price was marginally lower yesterday closing down US60c at $US390.15.

Benchmark Commonwealth February 2006 bonds closed at 8.72 per cent from 8.70 per cent at Monday's close.

The March 1999 stock was at 8.19 per cent from 8.17 per cent.