THE MARKET Sharp reaction to slump overseas

Press, 9 July 1986, Page 33

THE MARKET Sharp reaction to slump overseas

Selling pressure on top-tier shares pushed Barclays* index of industrial shares down 25.55 points to 2712.05 from Monday’s record high, but rises actually outnumbered falls four to three. The sharp drop in overseas sharemarkets worked its way through to the domestic market, partly for psychological reasons and partly because of the fall in New Zealand shares with high exposure across the Tasman, as the Australian market tumbled in the wake of Wall Street. The Dow Jones index suffered its biggest one-day fall in history — at least on a points basis — as it slid 62 points to 1839 (story page 39) — surpassing the previous record drop of 45.75 points last month.

Trading on the Christchurch Invercargill Stock Exchange appeared to be somewhat weaker after Monday’s high levels, said Mr Patrick Lee, market operator for the Christchurch sharebroking firm Chamberlain, Sturge and Company.

However, turnover remained high, he said.

“Brierley Investment and Equiticorp suffered from profit taking after Monday’s sharp gains. New Zealand Marine Farms and Rada went against the trend, and were keenly sought,” Mr Lee said. The immediate reaction to the $214 million bid for 72 per cent of FTC was lukewarm, with few FTC shares changing hands at the bid price of 180 c cash. The closing price was 190 c, up 10c, but only 10,000 shares were crossed and nobody was selling. "Wait and see,” was the attitude of the day. Brierleys lost 10c to 570, after trading in a range of 560 to 593, Equiticorp lost 25c to 545 after sales between 540 and 565, and Goodman Fielder dropped 35c to 430. Industrial Equity Pacific gave up 10c to 1120, and Tozer KM 30c to 500. Some other leaders had two-digit falls: Dominion Breweries 10c to 510 c, Watties, 15c to 385, Newmans 15c to 250 c, and Saudicorp 15c to 460. Carter Holt shed 40c to 380, L. D. Nathan 25c to 640, and Lion gave

up another 20c to 620. However, more issues rose than fell. Omnicorp added to recent gains with 16c to 240, NZ Marine Farms continued its run with a 20c gain to 290, NZ News also rose 20c to 950, Ceramco put on 15c to 715, Transpac 10c to 320, and Wilson and Horton, 10c to 660.

Other large falls were chalked up by secondliners; Manthel 25c, Smart 40c, NZ Salmon, 20c, the two Queenstown property companies 10c each, Taylor 20c, Sanford 15c, J. Smith 30c, and Autocrat 10c. Studmasters were in demand, with Pacerpac, up 20c to 760, and Allegra, up 50c to 240, standing out. The Barclays mining index plummeted 60.69 points to this year’s low of 123.20, as a result of NZ Goldfields losing a massive 320 c to 180 in the stock’s first trade for several months. NZ Goldfields rocketed last year from 45c to 630 c before announcing its involvement in an Indonesian mining venture. The turnover was 8.4 million shares, same as yesterday, worth $l5 million.