Us Slump Takes A Toll

The Age

Thursday August 6, 1998

JASON KOUTSOUKIS with AAP

Stocks fell yesterday under pressure from Wall Street where the New York market fell 300 points overnight, with most sectors recording losses.

Brokers said the falls were not as big as some had feared at the start of the day after the September futures contract on the Share Price Index fell 70 points overnight. The SPI ended the day 61 points lower at 2631.

"I thought one to two per cent (drop) wasn't too bad," Austock broker Mr David Perry said. "Some stocks were quite well supported."

Brokers said the Australian market had been partly cushioned from greater falls because it had not performed as strongly as the US market over the past 12 months.

"The Asian impact is obviously hitting us. It's obviously hitting the US, and it is obviously hitting Europe," said Mr Stephen Daley, funds manager at County Investment Management.

"But the magnitude is somewhat less there than the impact on Australia - our major trading partners are in Asia."

A Lodge & Partners broker, Mr Robert Thompson, said there was probably more downside for the Australian market.

"I must remain bearish in the current circumstances, there are not a lot of reasons which suggest the market is right for investment at the moment, a fact reflected by the high levels of cash being carried by the fund managers at the moment," he said.

The resources stocks were partly supported by a broad increase in commodity prices while the industrials were dragged down by the banking sector.

Among individual stocks, the ASX newcomer AMP bucked the trend, managing a late rally after two days of falls. It closed eight cents higher at $20.85.

BHP also rose eight cents, closing at $13.90 on modest trade of 3.5 million shares.

Another surprise was the diversified industrial PacDun, which rose four cents to $3.14, fuelled by rumors that the company was seeking to sell its underperforming cable division.

Of the other majors, National Australia Bank fell 13 cents to $22.36, Telstra lost 10 cents to $4.47, News Corp 35 cents to $11.54, and Lend Lease 60 cents to $34.50.

Most finance stocks were weaker. Commonwealth dropped 23 cents to $20.22, Westpac 16.5 cents to $10.25 and ANZ 19 cents to $10.26. St George fell eight cents to $10.24, and Adelaide lost 18 cents to $5.45. However, Macquarie rose three cents to $14.58.

Colonial fell seven cents to $5.19, National Mutual 11 cents to $2.88, QBE 17 cents to $5.79, and GIO Australia eight cents to $4.09.

Among other industrials, Coca-Cola Amatil fell 13 cents to $5.94, Brambles 35 cents to $34.50, Mayne Nickless 29 cents to $9.45, Australian Gas Light 28 cents to $10.30, and Leighton Holdings 24 cents to $5.45.

In the resources sector, Rio Tinto fell 25 cents to $18.25, WMC 10 cents to $4.81, North nine cents to $3.46, and Woodside 11 cents to $7.63.

The Papua New Guinea-based Orogen Minerals added two cents to $2.10 after announcing it was selling its $145 million stake in Lihir Gold, which rose five cents to $1.95.

Niugini Mining rose 15 cents to $2.45, Ashton Mining four cents to $1.04, Haoma Mining six cents to 31 cents, and Great Central Mines one cent to $1.50, while Newcrest fell four cents to $4.77, and Normandy three cents to $1.22.

MIM rose one cent to 75 cents, while QNI fell two cents to 65 cents, and Anaconda was steady at $3.60.

Gandel Retail Trust closed the day four cents - 3.15 per cent - lower at $1.23 despite the company announcing it had posted a 9 per cent increase in net operating profit for the six months to 30 June on the back of additional rental income from new acquisitions.

The trust reported a net operating profit of $58.46 million compared with $53.56 million in the previous corresponding period.

Global media group News Corp fell 35.3 cents to $11.54 while the preferred shares lost 35.1 cents to $10.02.

National turnover was 334.89 million shares worth $1.03 billion with falls outnumbering rises by 793 to 315. -- with AAP

*The benchmark All Ordinaries closed the day 42.1 points weaker at 2640.2, around the midpoint of the day's trading range, after the Dow Jones slumped 299.43 points to 8487.31 points in New York overnight. National turnover was 334.89 million shares worth $1.03 billion, with falls outnumbering rises by 793 to 315. The SPI contract plunged 61 points to 2631.