International Rush For Stock

Sydney Morning Herald

Tuesday July 6, 1999

By LACHLAN JOHNSTON

The sharemarket soared yesterday following record-breaking trading on Wall Street over the weekend.

The All Ordinaries index rose 49.2 to 3078.1.

This compares with the all-time high of 3145, which was set on April 27.

Brokers reported several fund managers rebalancing portfolios for the new financial year.

International buying also contributed to high turnover, despite US sharemarkets being closed for the Independence Day overnight.

The strong performance on Wall Street last Friday (the Dow Jones rose 72 to a record 11,139) and the US bond markets rallying spread through to Asian markets.

In Japan, the Nikkei broke through the 18,000 mark for the first time in 21 months, rising 202 to 18,135.

Hong Kong's Hang Seng rose 282 to 14,467.

Senior equities dealer at Intersuisse, Mr Andrew Coloretti, said that the strong rises indicated international investors had weighed into Asian markets, including Australia.

"With Wall Street closed, and the volume of stock that passed through the market, I think it has to be some big international orders," Mr Coloretti said.

"Australia is often categorised as part of Asia, and there appears to be a general rerating of the Asian region occurring at the moment."

The release of the quarterly Tankan index in Japan showed business confidence was picking up but this failed to impress local economists.

Nomura equities strategist Mr Eric Betts said the survey results had little impact on the local market, which was instead enjoying a boost from the falling US bond yields.

"While the headline number on the Tankan was good, the capital expenditure forecasts were negative, which is not positive for the Japanese economy," Mr Betts said.

"But, there are really hardly any risk factors in the short term that the Australian market has to be too worried about. Interest rates are on hold, commodity prices are enjoying a rise, the political uncertainty of the GST has disappeared."

The Banks index gained 1.3 per cent with Westpac leading the way with a 28c rise to $10.18 as rumours mounted that a buyback is about to be restarted.

ANZ climbed 24c to $11.58, NAB 20c to $25.27 and Commonwealth 24c to $24.52.

News Corp accounted for one-fifth of the All Ords rise. Ordinary shares rose 52c to $14.03 and the preferreds 55c to $12.70.

Both rose sharply on Friday.

Telstra rose 6c to $8.81 and Optus showed no signs of slowing down following Seven's selldown. It rose 10c to $3.57.

The diversified industrial, Wesfarmers, soared as much as 64c to a high of $14.30 on speculation it would be a leading bidder for a cornerstone stake in the soon-to-be privatised AlintaGas gas utility.

Miner-turned-Internet play, Western Minerals, also posted another strong gain, up 9c to 48c, on turnover of 17.3 million, following its listing in Berlin. Western is now a retailer of adult products and will be renamed Adultshop.com.

Another miner hoping to find gold on the Internet, Capital Energy, enjoyed heavy turnover, with 15.2 million shares changing hands as it fell 0.4c to 3c.