Aust Stocks Up, But Banks Still Safe Bet

Illawarra Mercury

Wednesday July 8, 1998

The Australian sharemarket yesterday closed higher on positive leads from New York and Asia, but investors still sought the safe haven of banks, brokers said.

The all ordinaries closed up 17.5 points, or 0.64 per cent, at 2769.3, off an intraday high of 2771.7 and a low of 2750.6.

Dealer Hamish Dee, of Henderson-Charlton Jones, said the Dow Jones Industrial Average, which gained 66.51 points, and the stronger US bond market helped the Australian bourse.

Asian markets, particularly Japan and Hong Kong, also were higher, aiding the local market in the afternoon session. ``We saw lower bond yields in the States which is always going to work for the interest rate sensitive stocks," Mr Dee said. ``I think investors are happy to see a little bit of stability on the Asian markets."

The benchmark 10-year Commonwealth Government bond yield was lower on the back of the stronger US treasuries market, closing at 5.45 per cent compared to 5.47 per cent on Monday.

Bank stocks were supported by the bond market, with National Australia Bank gaining 32 to $22.30 and Commonwealth Bank of Australia gaining 35.1 to $19.691. ANZ Banking Group climbed 22 to $11.79, Westpac Banking Corp rose 16.8 to $10.79 and St George Bank gained 27.4 to $10.724.

Weaker commodity prices on the back of bearish news from Japan curtailed the all resources index which closed up 1.7 points at 1073.2. The all industrials index finished 36.1 points higher at 4869.7.

Brokers said companies without fragile exposure to Asia's economic mess gained ground, with TAB shares hitting a new intraday high of $2.52 before closing up 12 cent at $2.51.