Correction As Wall St Plunges

Sun Herald

Sunday February 13, 2000

By JOHN SYNNOTT and DAVID POTTS

A 218-point plunge on Wall Street yesterday will drag the Australian sharemarket down tomorrow, brokers warn.

At one point, the Dow was down 286 points and triggered the shutdown of automated trading.

Wall Street is now technically in a correction, having fallen more than 10 per cent from its peak of 11,723 on January 14.

While the correction reverses high-flying Internet stocks, it confirms the long downward trend in the prices of blue-chip stocks.

Although the same 2pc fall would translate to a 60-point drop in the Australian market tomorrow, brokers were more sanguine, predicting a fall of about 20 points.

The market is expected to be helped by strong gains in commodity prices, including gold.

While technology stocks were at a record high last week, ``something had to give" in the face of rising interest rates, Mercantile Mutual's head of equities Peter Mouatt said.

``Rising interest rates cap the capacity of the share market to perform and we are seeing a correction among blue chip and resource stocks, although not a major one," he said.

The Australian sharemarket should soften on Monday, down 20 to 25 points, depending on News Corporation, which fell 65? on Friday to $23.05.

Dicksons stockbroker Michael Heffernan expects a 20-point drop, although that is dependent on company results which will be washing through.

Doubts about Microsoft's new Windows 2000 and a weaker than expected January sales growth hit Wall Street.

MARKETS
                Week            Latest
New York        Down 539        Down 218
                        close10,425.2
London          Up 8            Down 87
                        close6,193.3
Tokyot53Closed
                        close19,710.0
Sydney          Up 52           Down 5
                        close3,167.1
The dollar              Down 0.54?      US63.19?

SHARES
                Week's  Week's  %
                close   change
Best Three
China Pros      $1.48   83?     128
Viagold         25?     12?     92
Ebet            82?     36?     79
Worst Three
Aristocrat      $21.17  -$3.83  -15
Smith Hwd       $8.13   -$1.45  -15
Prop Trus       t       23?     -4?     -15