Australian market turns lower again

Press, 14 April 1980, Page 20

Australian market turns lower again

The Australian sharemarket also ended the week’s trading on the downswing, against a background of shaky commodity prices, rising interest rates, and a disappointing report from the Ashtoii diamond venture.

Weaker base metal and gold prices left little room for gains on the mining boards, and confusing signals on interest rates subdued activity in the industrial sector.

A decision by the National Bank to raise interest rates on overdrafts above $lOO,OOO by a full 1 per cent appeared to point to an escalation in the domestic interest rate spiral just as it appeared that United States interest rates were beginning to come off their peak.

The new domestic rates had an immediate impact on building industry stocks

such as Pioneer Cortcrritri and Moriief/at a time when it was hoped the slipping rates in the U.S. would help divert some . sdrely missed foreign cash back into the Australian market.

Stronger- gold and base metal prices, and an announcement that MIM had won a $74054 cOal deal with Japan, helped thri Sydney allordindries ihdex to stage an 8.64 point rally to 796.25 Oil. Tuesday, but the negative reaction, to the Ashton report ruled the market for the rest' of the week — pushing the ihdex to a • net loss of 1.50 points for the week. Traders said that the Ashton gem count appeared too low to support a viable commercial operation, and Some investors were discouraged by indications that they would be called upon to contribute to a SI7M exploration

programriie. News that SaritOS had struck another promising Oil flow at its Dullittgrifi NO. 4 well in South Australia’s COOpfif basin proved one Of the few bright spots at the week’s end, and the company’s stock jumped 50c to 600 c.

8.H.P., which announced a 20c interim dividend, lost 20c on Friday to finish at the previous week’s close of $11.90 because rumours of a bonus issue failed to materialise.

In other developments, •United Packages returned to the take-over arena for the second time in two weeks to offer 502 c a share for the Sydney-based' -hotel, and furniture group. Sebel,'Ltd, The move coincides with the company’s plans to take over the flriance group Midland Credits.

Brokers said that the prospects frit the market remain uncertain as long as world commodity markets remain confused about events surrounding the crisis in Iran, the unsteady U.S. dollar, and conflicting interest rates.

Some Of the major price changes, compared with the previous Week, were: Utah fell 20c to. 390 c, EZ Was 20c higher at 600 c, Peko lost 20c to 710 c, Queensland Mines rose 20c to 550 c, MIM firmed 7c to 415 c, CRA fell 14c to 4§oc and Ashton 45c to 235 c.

• On the industrial boards, ACI lost 2c to 200 c, CSR was off 4c at 500 c, Ampol Petroleum lost 3c to 102 c, comalco jumped 30c to 470 c, Tooths shed 7c to 200 c, Pioneer Concrete fell 7c to 183 c, Buridaberg gained 20c to 950 c, and the A.N.Z. lost 5c 'to 430 c. .