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The sharemarket slumped to a 12-month low yesterday, hurt by further sharp
falls in the US on Friday and a last-minute rejig of share portfolios as local
indices move to a free-float format.
More than $3 billion worth of shares changed hands as the S&P/ASX 200
registered a 1.3 per cent fall, losing 38 points to 2970.9 its lowest level
since September last year.
Institutional investors accounted for the bulk of the trading, with Salomon
Smith Barney by far the most active. According to one trader, the investment
bank was responsible for almost half the total value of shares traded.
Traders said the majority of the trades were related to the deadline for
index-tracking fund managers to align their portfolios with the new free-float
calculation being applied to stocks.
In line with moves made recently by international index operator Morgan
Stanley Capital International (MSCI), Standard & Poor's has removed any large
holdings from the calculation of a company's index weighting.
As a result, media stocks fell more sharply than many others. News Corp
ordinary shares were off 41c to $8.79 while the preferreds dropped 33c to $7.53,
as the Murdoch family's 30 per cent stake was removed from the stock's index
weighting.
The media group was also hit by concerns that regulatory approval would now
be needed before it could buy Italian pay television group Telepiu.
Elsewhere in the sector, PBL fell 27c to $7.84, while Fairfax lost 11c to
$2.84.
The market managed to outperform Asia yesterday, where the Nikkei 225 fell
1.54 per cent and the Hang Seng 2.39 per cent. London's FTSE had slumped 3.14
per cent in early trade last night.
``The only sector with reliable earnings, low risk and capital guaranteed is
cash," said Marcus Padley of broker Tolhurst Noall. Technical chartists have
been warning traders that the picture in the US was likely to remain sickly for
the time being, Mr Padley added.
Embattled financial services group AMP fell 61c to $11.70 as the stock moved
ex-dividend by 26c. Dealers said the stock was also suffering from a shaky UK
sharemarket and worries about the extent of its capital raising.
Telstra fell 2c to $4.74 and was the most heavily traded stock of the day,
with 37 million shares changing hands. The telecom was hit by comments made in
its 2001 annual report.
Qantas fell 12c to $3.58 amid fears war against Iraq could send the price of
oil soaring and limit the amount of international travel.
BHP Billiton was also hit by oil concerns and scepticism that global
economic recovery is imminent, falling 32c to $9.05.
Woodside Petroleum was one of the few risers, up 44c to $12.40, the stock
having a remarkable turnaround after hitting a 12-month low earlier in the day.
WMC closed unchanged at $7.09 after earlier falling as low as $6.90.
The darling of the small cap sector, OMI, continued to soar. The healthcare
company jumped 14c to $4.09 after earlier hitting an all-time high of $4.30.
OMI has surged from $1.47 during the past two weeks, after signing a deal
with German conglomerate B. Braun to sell the group ``not less" than 4 million
OMI safety valves. The group was also given Australian regulatory approval to
sell its safety scalpel.
MONEY
$A/US? 54.39 -0.14
TWI 50.9 -0.2
90-day bank bills 4.880 -0.020
3-year bonds 4.935 -0.130
10-year bonds 5.345 -0.100
YESTERDAY'S MOVES
Rises 320 Falls 707 Steady 289
Sept SPI 2949.0 -69.0
ASX 200 2970.9 -38.0
Biz.com Tech 812.0 -18.4
Industrials 3517.1 -37.1
Energy 4017.3 +70.6
Volume Value 746.2m 3.257bn
WINNERS
Iluka Resources +5.48%
Autron Corp +4.76
Gribbles Group +3.92
Telecom NZ +3.88
Corp Express Aust +3.80
Solution 6 +3.45
Newcrest Mining +2.31
Djerriwarrh Invest +2.17
Woodside Petroleum +2.01
TAB +1.54
LOSERS
ERG -8.33%
Axon Instruments -7.50
Novogen -6.04
Symex Holdings -5.56
AMP -4.87
News Corp -4.57
PBL -4.56
Pac Hydro -4.48
MYOB -4.35
Kaz Group -4.26
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