SHAREMARKET Downtrend broken but rally not sustained

Press, 7 December 1988, Page 48

SHAREMARKET Downtrend broken but rally not sustained

The New Zealand sharemarket broke a seven-day down trend yesterday and found support around the 1800-level on Barclays index, but closed off the top.. The market opened on quite a strong note on the back of a 32 point rise on Wall Street, but the rally was not sustained after lunch when Australian investors stayed away although the Australian market staged a good recovery. Volume improved slightly, but trading remained dull and lacklustre, as 6.0 million shares changed hands for $8.6 million — an average of 142 c a share. The Barclays index of industrial shares recovered 4.9 points to close at 1799.90, and the NZSE gross index closed 1.20 points higher at 665.15, after having given up two thirds of the morning’s gain of 3.85 points. In spite of the indices’ gains, falls outnumbered rises four to three, but most price movements were small and most of the top heavyweights were among the rises.

The market is desperately searching for direction, and it might just get it today from the Prime Minister’s address to Christchurch businessmen. It is to be hoped that it will restore confidence.

A spokesperson from the Lange’s office told New Zealand Press Association that the speech would be an endorsement of current policies aimed at generating confidence and would not indicate a change of direction, which is what the market would like to hear.

If this message fails to come through, the market will have to wait until the end of next week, after the Cabinet meeting on Wednesday and Thursday. Of the big three Fletcher Challenge put on 3c, to 448, Brierley Investments was unchanged, and Goodman Fielder Wattle was 2c higher at 268. Elders NZFP, at 316, and Carter Holt Harvey, at 179, both rose 3c.

Among the banks, ANZ Banking Group rose 5c to 705, but Country-

wide lost 9c to 204 and Bank of New Zealand slipped 1c to 142.

Newspaper stocks also had a mixed performance, with Wilson and Horton up 3c to 540, but INL down 20c to 360.

Investment banks were also mixed: Chase Corp rose 3c to 101, but NZ Equities at 53 and EuroNational at 28 were 2c lower, while Equiticorp eased 1c to 42. NZI Corp also eased Ic, to 58, and Robert Jones Investments was unchanged. Mr Ken Stevens, of Guthrie Equities, said that the market finally bounced back with buying pressure evident in the morning session — helped along by the 31 point rise on Wall Street overnight. “The market began the afternoon firm, with continued buying in response to a stronger Australian market, but this was shortlived as sellers emerged towards the close. However, the market still finished higher than the previous day,” Mr Stevens said.