A Flat Finish To A Tough Week

Sydney Morning Herald

Saturday May 9, 1998

By MORGAN MELLISH

Another weak performance by mining stocks dragged the sharemarket down for the fourth day in a row yesterday, ending a tough week in which falls on Wall Street and weaker commodity prices drove selling.

The All Ordinaries index fell 22.4 points in morning trading as investors reacted to the third straight fall on Wall Street.

However, the index recovered later in the day to finish at 2780, down just 0.3. It ended the week 24.2, or 0.9 per cent, down.

The All Resources fell 9.4 to 1169.8 while the All Industrials rose 8.9 to 4793.6.

Wall Street's Dow Jones fell 78 to 8976.7, bringing falls over the past three days to 215.

Brokers said the falls, combined with weakening commodity prices, were dampening the outlook, which is particularly important for AMP.

The soon-to-be-listed company is forecasting a pre- extraordinary net profit for the year to December of between $774 million and $977 million. In its prospectus it says the upper range of this forecast would only be achievable if the sharemarket stayed above 2750.

News Corp was one of the day's worst stocks, dropping as much as 45c to $10.18 before closing at $10.32, down 31c, as several brokers downgraded it after a mixed third quarter.

"Without the inclusion of Titanic, the result was fairly flat," said State Street Global Advisors head of equities Mr John Watson.

WA Newspapers fell 6c to $5.45 on the back of a lacklustre third quarter and concern that News Corp was considering starting a rival paper in WA.

The banking sector received a boost from the announcement of Westpac's additional share buyback. Westpac climbed 14c to $10.61, ANZ 33c to $11.22 and Commonwealth 7c to $18.95, while National Australia Bank rose 6c to $22.39 as the market digested its 16 per cent fall in first-half net profit.

Insurance stocks were stronger, with National Mutual up 8c to $3.78 and QBE 5c to $7.15. Among other industrials, Village Roadshow gained 15c to $3.55 while Coles Myer rose 3c to $7.58 after strong April quarter sales figures.

Overnight falls in commodity prices, including gold which fell $US2.05 an ounce to $US298.70, dragged mining stocks down.

BHP fell 20c to $14 before closing at $14.19, steady, its lowest level in nearly two months. North fell 2c to $4.07 and Rio Tinto 26c to $21.23.