Australian market broadly higher

Press, 7 March 1983, Page 26

Australian market broadly higher

Australian share prices finished last week broadly .higher, despite the’ jolt to the mining sector caused by the sharp decline in international gold prices and the unsettling effect on the entire market of opinion polls showing the opposition Labour Party the clear favourite to win the Federal election. After falling sharply on Monday and Tuesday in reaction to plummeting international gold prices, sharply rising domestic interest rates and fears of a total collapse in the world oil pricing system, the market swung around to post impressive gains in the last three days, in reaction to improving international gold prices and the record-setting performance on Wall Street. The late improvement was more than enough to offset the earlier losses, as the all-

ordinaries index finished the week 6.1 points higher at 512.5, with the all-industrials 4.3 points higher at 649.1, and the all-resources 7.5 points higher at 402.3. One of the major reasons for the market’s impressive performance last week was the strength of the oil and gas sector, which posted a significant gain after falling steadily in recent weeks in reaction to anticipated sharp cuts in world oil prices brought about by a worldwide oil glut. The oil-and-gas index rose 12.0 points to 366.6, as bargain hunters were motivated to bid for local producers in the belief that world oil prices may not fall as sharply as originally expected. The other major feature of trading was the market’s surprising resilience in the face of opinion polls consistently showing the opposition

Labour Party leading the governing Liberal/National Party coalition by between 9 to 12 per cent in the final days before the election. In the week after the announcement of the snap election on February 3, the market fell sharply in reaction to the possibility of the Labour Party coming to power. But in the past two weeks as that possibility became a growing probability, national sharemarkets have reacted phlegmatically to the prospect, as share prices have risen on increased turnover. The politically sensitive heavyweight miners, which slumped 14 per cent within a week of the election announcement, have recovered half their initial falls, and industrial stocks have recouped one-third of their initial 6.0 per cent decline.