Sharp fall by US sharemarket

Press, 10 February 1982, Page 23

Sharp fall by US sharemarket

PA New York Stock prices fell to their lowest levels in more than three months on Wall Street yesterday, under the combined w’eight of President Reagan's budget proposals and disappointing money supply figures. The Dow Jones industrial average fell 17.60 points to 833.40; its lowest close Since October 29. 1981. when it declined to 832.95. Analysts, said President Reagan's projection of a $1!591.500M budget deficit in fiscal 1983 fuelled concerns that interest rates will remain high for some time to come. The U.S. dollar's value rose against other major currencies in United States and Euuropean trading yesterday amid fears that the huge deficits projected in Presi-

dent Reagan's budget proposals will keep interest rates high. Gold's price slumped from 5U5384.25 to $379.75 an ounce in London. ‘lt’s a 99 per cent interest rate-sensitive market." said Mr Arthur Agostini, the Chief Foreign Exchange Dealer at Manufacturers Hannover Trust Co., in New York. Trading was sporadic with "bits and pieces” of evidence that foreign central banks intervened in an effort to support their currencies against the dollar. As long as there were no

substantial decline seen ahead for interest rates, dealers had no urge .to sell dollars. Mr Ago&ini said. The deficit fears alone sent open-market rates higher yesterday and the sterling slipped in late U.S. trading. Gold's price fell $5 a troy ounce to $379.50 in contracts for current delivery on the Commodity Exchange in New York. In later trading, described as very light, the Republic National Bank quoted gold at $379 bid. down $4.25 an ounce from late on Friday.