Shares Down In Listless Trading

Sydney Morning Herald

Tuesday October 7, 1997

By MORGAN MELLISH

Weaker commodity prices and profit-taking in top industrial stocks led the Australian sharemarket lower yesterday despite overnight gains on Wall Street.

The All Ordinaries index fell 15.4 points, or 0.56 per cent, to 2754.3 in what brokers described as a quiet day.

The All Resources index fell 14.9 points, or 1.09 per cent, to 1358.3 while the All Industrials index slid 17 points, or 0.37 per cent, to 4528.6.

The Dow Jones Industrial Average rose 61.64 points to 8100.22 on Monday night amid speculation that United States companies' third-quarter earnings would beat forecasts.

Brokers said local activity was hindered by volatility in commodity prices and morning selling by Asian investors, as well as by investors awaiting next month's Telstra float.

"There was a lack of new business attracted to the market because of weaker bullion, metal and oil prices," Shaw Stockbroking's Mr Jamie Spiteri said.

Among industrials to lose ground, building group Leighton dropped 17c to $7.13, Howard Smith 13c to $13.50, Westfield Holdings 30c to $30 and Tabcorp 10c to $6.80.

Foster's Brewing Group eased 3c to $2.86 as the market digested news that BHP plans to sell its $289 million stake in the company to BHP shareholders for $2.60 a share.

Coca-Cola Amatil fell 82c to $14.13 after the Philippine peso fell to an all-time low. The peso's weakness is expected to reduce profit in CCA's large bottling operation in The Philippines.

The Indonesian rupiah - where CCA also has a large operation - slumped further.

Banks defied the trend with the sector index rising 2.5 points to 5494.1. National Australia Bank rose 7c to 21.81 and Commonwealth 10c to $17.36. Westpac was steady at $8.60 after 4.4 million shares changed hands. ANZ slid 2c to $11.41.

"I think NAB will pull back under $21 when the share buyback finishes," PG Intercapital's Mr Phillip Parker said.

"It's a great bank but, compared to other banks, it's looking a bit overcooked at the moment," Mr Parker said.

NAB has bought back about 98.1 million shares of a planned 101 million.

Gold stocks were mixed after December gold futures fell US$2.30 on Monday night to US$334.60 an ounce.

Dominion rose 5c to 65c while Acacia fell 6c to $1.77. Normandy shed 5c to $1.76 following Newcrest's announcement earlier this week that it plans to sell its 11.8 per cent stake in the company. Newcrest climbed 11c to $2.78.

Great Central Mines closed steady at $2.16 after the closure of its takeover bid for Eagle Mining on Monday. Eagle was steady at the $3 offer price.

Elsewhere in resources, BHP fell 18c to $16.07 and WMC 17c to $6.51. Rio Tinto rose 5c to $21.05. Santos shed 20c to $7.23 and Woodside Petroleum lost 23c to $12.85 after oil prices fell.

Hotel operator AAPC fell 3c to 53c after 8.5 million shares were crossed by Prudential-Bache at 54c each.

One analyst said some investors were bargain-hunting following a recent sharp fall in the company's share price on concerns over its Asian exposure.

Vos Industries rose 9c to 50c after announcing that a new chip-frying machine had performed well in trials with the US-based chain Burger King.