Australian Markets Report

Provided by The Australian Investor

Tuesday 18th September 2001

The Australian market continued to take on water yesterday as a late announcement from QBE led to further selling of insurance stocks in afternoon trading. Australian investors seemed to followed Europe, sending a disheartening portent to what is anticipated to be a significant sell-off, particularly within the insurance and travel sectors.

The All Ordinaries dropped 126.9 points (4.2 per cent) to 2908.5 while the S&P/ASX 200 retreated 126 points (4.2 per cent) to 2974.8.

The insurance sector was hardest hit, with the insurance index plummeting 630.8 points (9.1 per cent) to 6291.2. Leading down the sector was QBE who announced to the market that its exposure to the New York disaster was greater than it had originally expected. The company also added that claims would take a substantial bite out of the company's FY2002 profit. Shareholders punished the insurance company wiping out over a third of the stock's value, QBE finishing the day down $3.39 (37 per cent) to $5.85. Suncorp-Metway also followed suit down 95 cents (7.9 per cent) to $11.00, AMP was down 95 cents (5.3 per cent) to $16.85 while NRMA slipped below the $3 mark, down 26 cents (8.4 per cent) to $2.82.

On-line travel agent Flight Centre continued to struggle, its shares plummeting $2.95 (14.4 per cent) to $17.55 while Qantas also experienced more turbulence, down 43 cents (13 per cent) to $2.88.

The expected increase in fuel costs continues to push transport stocks down with the transport index down 399 points (6.5 per cent) to 5743.5. Toll Holdings led the decline, down $1.82 (8 per cent) to $20.88 while Lang Corporation retreated 83 cents (7.3 per cent) to $10.61.

Banking stocks continued to struggle, with the bank index down 323.9 points (4.1 per cent) to 7640.9. Macquarie Bank was the hardest hit, losing $3.23 (9.1 per cent) to $32.20, the Bank of WA was down 24 cents (6.3 per cent) $3.56 while NAB continued its troublesome fortnight down a further $1.54 (5.6 per cent) to $25.85.

The resource sector faired little better, with Rio Tinto down $1.59 (4.9 per cent) to $30.50, Oil Search skydived 11 cents (20.4 per cent) to 43 cents while WMC lost 28 cents to $7.49. On a day when black ink was almost as rare as dodo eggs, Lihir Gold gained 6 cents (6.5 per cent) to 98 cents, Woodside gained 8 cents to $14.13 while Compass Resources defied a bear market to skyrocket 16 cents (57 per cent) to 44 cents.

Media stocks were also down, the media index retreating 1537.2 points (6 per cent) to 24261.8. Weighing down the sector was News Corporation, which plunged 93 cents (6.8 per cent) to $12.70, PBL lost 35 cents (3.9 per cent) to $8.51 while APN shed 30 cents (7.5 per cent) to $3.70.

Other major movers included Village Roadshow which dived 18 cents (11.2 per cents) to $1.43, Billabong was down 81 cents (11.5 cents) to $6.23, Aristocrat shed 66 cents (9.9 per cent) to $5.99, but singing the saddest tune was Prana Biotechnology, which almost halved in today's trading, down 45 cents (47.4 per cent) to 50 cents.

- Industrials

The S&P/ASX 200 Industrials index retreated 227.9 points (4.3 per cent) to 5113.5

- Resources

The S&P/ASX 200 Resources index was down 35.6 points (2.6 per cent) points to 1350.3

- Gold

The gold index gained 4.4 points (0.5 per cent) to 837.1

- AUD

At 1600 local time the Aussie dollar was trading at:

$US 0.5119 down from 0.515
Euro 0.5528 down from 0.5645
Yen 60.38 down from 61.32
$NZ $1.2242 up from $1.218
Stg 0.3469 down from 0.3504

- Asian Markets

In TOKYO, The Nikkei plummeted 504.5 (5 per cent) points to 9504.4

In HONG KONG, The Hang Seng dropped 298.7 points (3.1 per cent) to 9356.6 by the end of the first session

- SPI Index SFE Sept-1 Future

The SPI index was down 82 to 3084

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