All Ords Index Tumbles
The Age
Saturday July 10, 1999
The sharemarket closed weaker yesterday, with a negative lead from Wall Street and a huge Merrill Lynch sell portfolio resulting in falls across most indexes.
The All Ordinaries Index closed down 45.3 points at 3041.0, a 1.5per cent tumble. Analysts were surprised by the magnitude of the fall.
Mr Adrian Mulcahy, manager of equity investments at IOOF investment management, said he could not put his finger on what exactly drove the slump.
``It's a bit of a surprising day," he said.
``Our market isn't very big, it doesn't take much for a very big player to have an impact. So maybe there has been a bit of switching around the region."
He said falls among stocks at the top end of the market released a domino effect that was felt across most sectors.
The All Bank and Finance Index dropped 103.8 points to 6367.5, while the All Industrials Index fell 86.5 points to 5243.1.
``The biggest contributor to the ASX decline today is Telstra, closely followed by News Corp and the banks, " he said.
Stockbroking firm Merrill Lynch had a strong impact on the market with a sell portfolio worth between $120 to $130 million, which featured many leading stocks.The portfolio accounted for 15.1 per cent of trading on the market.
Merrill Lynch sold 2.3 million Westpac shares, 1.8 million National Australia Bank shares, 1.8 million BHP shares and 1.6 million Telstra shares. Two other large stockbroking firms also had busy trading days.
``Wall Street didn't have a particularly exciting night, particularly on the industrial stocks. Their best stocks were technology stocks and we don't have many of them," Mr Bruce Hockman, an economist at Deutsche Morgan Grenfell Stockbrokers said.
He said the market was still seeing investors switching money into the resources sector and that there are continuing concerns among investors over the future of interest rates.
``There's a lot of overseas resource buying and domestic accounts are also moving their weights around a little bit," he said.
``The data in the last couple of days would just have people a bit more worried about where interest rates are going. We had another indicator of that late today with the NAB slightly increasing the rate of its variable mortgage."
Turnover on the market yesterday was the strongest for the week with 492.6 million shares worth $A1.482 billion changing hands. Falls outnumbered rises 490 to 403 and 289 stocks traded unchanged.
The futures market closed lower, with the September futures contract losing 26 points to 3070, at a 29-point premium to the cash market.
Among the big four banks, the National Australia Bank dropped 44 cents to $24.15, while ANZ lost 29 cents to $10.95. Westpac fell 18 cents to $9.65 and the Commonwealth Bank dropped 31 cents to$23.54.
Telstra declined 28 cents to $8.67, while Cable & Wireless Optus eased 6.5 cents to $3.515. AAPT rose 9 cents to $4.65.
Media giant News Corp fell 39.6 cents to $13.56 and PBL lost 7 cents to $10.18.
SUMMARY: The All Ordinaries Index fell 45.3 points yesterday to close at 3041, as declines in leading banking, gold, mining and media stocks ended the week on a sour note for investors. The Gold Index recorded the biggest fall, down 3.62 per cent, while the Media Index slipped 676.9 points, or 2.38 per cent, 20 27,752.4.
© 1999 The Age
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