Tug Of War Ends In A Tie

The Age

Tuesday March 23, 1999

ELI GREENBLAT

The sharemarket produced a mixed bag of results yesterday as ex-dividend stocks and rising commodity prices played a tug of war with share prices.

The All Ordinaries Index finished the day just one point higher, as several blue-chip and market heavyweight stocks shed their dividends and dragged the benchmark index lower in the morning.

But, a flood of investors took the market from its low of 2963.5 points early in the day to close at 2985.5 as speculation about takeover activity in the banking sector lifted market sentiment.

Within the index, 15 stocks reached 52-week lows and 18 stocks hit 52-week highs, while falls outpaced rises by 699 to 520 with 440 stocks unchanged.

National turnover was 324.89 million shares valued at $1.05 billion, while on the Sydney Futures Exchange, the March contract on the Share Price Index rose five points to 2993.0 - a 7.5-point premium to the physical market.

Analysts said gains were capped by a lack of fresh economic news, with a closed Japanese stockmarket also sapping the local market of strength.

``It's very uninteresting - there's no news here or overseas this week," said Mr Peter Struk, a director at Reynolds & Co.

Mr Struk said that there was probably some kind of psychological barrier at work as the index headed towards the 3000 mark.

``There's been quite a bit of support around the area (3000 mark) on the sell side," he said.

Despite the Dow Jones Industrial Average Index punching through its own barrier of 10,000 points three times last week, the All Ords has consistently failed to puncture 3000 points. Since 11March it has traded between 2950 and 2992.2 points.

Several stocks went ex-dividend, recording a decline in their share prices. They included AMP, down eight cents at $17.80, Telstra down five cents at $8.34 and HIH Insurance down four cents at $1.97.

Other heavyweights to fall were Rio Tinto down 31 cents at $21.60, Brambles Industries down 9.3 cents at $40.50, News Corporation down 15 cents at $11.71 and National Mutual down five cents at $2.66.

The Bank and Finance Index rose 38.6 points, or 0.54 per cent, to 7124.2 as speculation mounted that one of the four big Australian banks was likely to buy BT Funds Management.

Analysts said ANZ had firmed as favorite to buy the group, and its share price rose 10 cents to $11.50 - a signal, brokers said, that the acquisition would be viewed positively by the market.

Among the other banks, Commonwealth Bank rose 34.1 cents to $26.27, National Australia Bank put on seven cents to $28.42 and Westpac firmed five cents to $11.31.

Commodity prices were stronger over the weekend, which gave some support to local resource and mining plays.

The Commodity Research Bureau Index gained 0.56 points to 188.12, while positive price movements were also recorded by oil, gold, silver, zinc and aluminium.

Within the sector, BHP rose 29 cents to $13.25, Woodside Petroleum gained 14 cents to $9.20, WMC increased four cents to $5.23 and Normandy Mining rose four cents to $1.36.

* SUMMARY: The All Ordinaries Index rose one point to close at 2985.5 after an afternoon rally lifted it from its intraday low of 2963.5. Several heavyweight stocks went ex-dividend yesterday and declines in their share prices limited gains by the All Ords. The Building Materials Index and Media Index recorded the biggest falls.