Profit Takers Hit Ords

The Age

Saturday December 11, 1999

ELI GREENBLAT

Profit taking in leading industrial stocks and weaker commodity prices overnight deprived the sharemarket of securing a record high yesterday, as volumes started to shrink in the lead-up to Christmas.

The All Ordinaries Index was less than 10 points short of a record at the close of trade on Thursday, and with Wall Street strong overnight, many brokers were expecting a new high yesterday.

But, they were disappointed. The All Ords dropped immediately upon opening and closed 16.3 points weaker at 3120.3.

It was a different picture on Wall Street where stocks closed mostly higher, with the Dow Jones Industrial Average climbing 66.67 points to 11,134.79.

The technology-heavy Nasdaq Composite Index edged up 8.09 points to 3594.17, a new closing high, on record volume.

The broader Standard & Poor's 500 rose 4.23 points to 1,408.11 points.

Mr Adrian Mulcahy, head of equity investments at IOOF, said falls in the top market heavyweight stocks were mostly to blame for the decline on the local market.

``When you have stocks like Telstra, News Corp, Commonwealth Bank and NAB falling its difficult for the All Ords to post a gain."

He said the gradual slide in volumes was also keeping the sharemarket lower, as investors rule off their books before Christmas and the New Year's Eve holidays.

The All Industrials Index fell 30.3 points to 5434.5, while the All Mining Index was three points weaker at 715.4.

The Gold Index dropped by nearly 2per cent after a slide in the gold price overnight, and most resource stocks were weaker after base-metal prices also dipped.

Falls by blue-chip industrials took their toll on industrial indices, as the 20 Leaders Index dropped 10.3 points, or 0.55per cent, to 1864.4 and the 50 Leaders Index lost 17.9 points, or 0.57per cent, to 3104.5.

Among the leading stocks, Commonwealth Bank fell 33 cents to $25.72, News Corporation slipped 15 cents to $15.85, Lend Lease eased eight cents to $21.27, Foster's Brewing dipped five cents to $4.22 and National Australia Bank fell two cents to $22.72.

In the telecommunications sector, Telstra gave up 13 cents to $8.82, while Telstra2 instalment receipts fell 10 cents to $5.88.

The number-two telephone company Cable & Wireless Optus climbed 8.6 cents to $4.98, while AAPT rose seven cents to $5.28.

The market has taken nearly 18per cent off the share price of Coca-Cola Amatil over the past two days, sending the stock to a 15-month low.

The sell-off was triggered by Thursday's announcement that a restructure of the company's Philippines operations would result in a $70 million abnormal charge this year, dragging down profits.

Coca-Cola Amatil was down 36 cents yesterday at $4.24, after hitting a low of $4.14.

The broking firm ABN-Amro has reduced its recommendation on CCA from accumulate to hold, having significantly downgraded the company's profit forecast for the next two financial years.

ABN-Amro has cut its net profit after tax forecasts for CCA by 35per cent for 2000-2001 and 30per cent for 2001-2002.

The technology boom claimed another win yesterday after Ezenet listed on the Australian Stock Exchange at double its offer price of 50 cents a share.

The company, which sells boxes providing Internet and e-mail access over an ordinary television, started trading at $1 a share before closing marginally weaker at 92.5 cents.

SUMMARY: The All Ordinaries Index fell 16.3 points yesterday, or 0.52per cent, to close at 3120.3 after hitting a low of 3108.4 in afternoon trade. The Food and Household Goods Index recorded the biggest decline, down 133.9 points, or 3.52per cent, to 3669.2. The Gold Index also suffered, slipping 17.9 points, or 1.92per cent, to 914.6.