No Rest For Market On Labour Day

The Age

Tuesday March 9, 2004

GABRIELLE COSTA

Strong trade puts the indices within cooee of new records, despite falls in US markets.

Banks and resource companies were the main force behind a strong start to the trading week that propelled the sharemarket to its highest close in two years and within reach of new records.

The main measure of the performance of Australia's top listed companies, the S&P/ASX 200 Index, finished 12.5 points higher at 3420 as the benchmark All Ordinaries Index rose 9.2 points to finish the day at 3425.5.

In both cases, those highs have not been seen since early 2002, after which the indices fell for 12 months before bottoming out and starting to trend upwards.

Yesterday's rise came despite a mixed result in the US on Friday, where investors were weighing up the consequences of what many found to be a surprisingly weak employment report for February.

Experts say strong jobs data is the key to a move in interest rates in the US - a move that could have implications for a range of listed companies.

Technology stocks fell, sending the Nasdaq Composite Index down 7.48 points to end the trading week at 2047.63. Blue-chip shares finished only marginally better. The Dow Jones Industrial Average finished 7.55 points up on the day at 10,595.55.

``I think our market's trading a little bit on its own momentum," said Macquarie Equities associate director David Halliday. ``At the moment we're within touching distance of all-time highs . . . We're within 20-odd points of new highs (on the All Ords)."

The big four banks were responsible for much of yesterday's gain. Grant Williams, a director at Reynolds Stockbrokers, said the banks were up because of a rally on the bond market.

He said poor employment data out of the US on Friday night had led to a weakening in the US dollar, with a resultant turnaround in the Australian dollar and expectations that interest rates in the US and Australia would probably not move in the near future.

``We're very much focused on rates here," Mr Williams said. But ``you wouldn't want to bet too much" on what the Reserve Bank was planning because it had to take into account other factors including rising credit card debt.

Among the banks, ANZ rose 40 to $18.75, Westpac was 34 higher at $17.42, National was also up 34 to $31.78 and Commonwealth rose 8 to $31.92.

In resources, a weekend rise in the price of crude oil helped BHP Billiton climb 3 to $12.56, Rio Tinto 21 to $36.36, and Woodside Petroleum 17 to $15.60.

Among other movers were News Corp, whose ordinary shares were 18 lower at $12.28, with the preferred offering dipping 12 to $10.75. Publishing and Broadcasting Ltd fell 5 to close at $12.30.

Telstra lost 5 to $4.72, while the product of another Commonwealth Government float, Qantas, was 3 lower at $3.58.

In retail, Coles Myer - due to report its results this week - was 10 higher at $7.94. But the other supermarket giant, Woolworths, slipped 7 to $11.87.

AMP rose 8 to $5.28.

Mr Williams said several companies whose stocks rose as the Australian dollar fell last week had turned around as the currency again began to move up against its US counterpart.

BRIEF CASE PERPETUAL TRUSTEES AUSTRALIA

The sharemarket's 26 per cent rise in value over the past year has bolstered the fortunes of Perpetual Trustees. The $1.64 billion company is a fund manager and provides trustee, executor, financial planning and superannuation services. And because it has money invested in shares, its fortunes are closely linked to those of the sharemarket. Late last month, new chief executive David Deverall announced that operating profit for the six months to December 31 was up 24 per cent on the previous corresponding period. The dividend for the half-year was a fully franked 70 , up 10 on that paid for the final six months of 2002. It was coupled with a fully franked special dividend of 50 .

© 2004 The Age

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