Australian Markets Weekly Wrap

Provided by The Australian Investor

Saturday 30th June 2001

Another Choppy Week, Another Friday Rally

The week was characterised by exaggerated responses to both profit warnings and promising outlooks, and the picture was confused by window-dressing, tax loss selling, and investors getting back into stocks they'd ditched days before. However, on Friday, the choppy action solidified into a broad rally. The S&P/ASX 200 rose 17.8 points or 0.5 per cent over the course of the week to close at 3,446.1. The All Ordinaries hit 3,384, up 19.3 points or 0.6 per cent for the week.

On Monday, Coles Myer issued a profit warning, and got beaten up. Its shares closed the week down 83c at $6.32. Uecomm warned, and ended the week down 5c at 16.5c. Brambles repeated its profit warning and advised the sale of its Ensco waste management business was coming, and by the end of the week it had. Brambles closed the week up 20c at $48.00. Auspine announced a five-year contract to supply woodchips to Japan, and its shares closed the week up 13c at $2.34.

On Tuesday, CSL advised it had bought a US plasma business, and upgraded its earnings outlook. The market broke out the champagne. Its shares leaped, just missing $50.00 and closed the week at $47.70, up $9.101. Startrack announced a major new African contract, and ended down 1.5c at 8c. Olea Australia issued a warning and ended steady at 24.5c. Tuesday was also the day BankWest and St George Bank confirmed they were talking, Barrick announced its offer for Homestake, exciting the gold sector, Austrim Nylex issued a warning, Legalco put one out too and Chariot Internet warned of a $4.5 million loss.

On Tuesday night in the US, consumer confidence data showed a rise, and so did new home sales data, up 0.8 per cent.

On Wednesday, Mobile Communications issued a warning, and its shares closed steady at $4.01. Leighton tipped another record profit, not the first time this news has had an outing, but the market was receptive this time, and rose 55c to $8.35. Moody's revised AGL outlook, and it closed the week up 38c at $8.48. Snack Foods announced a profit increase and closed up 14c at $1.16. Cochlear gave good news on its profit, and closed up $2.60 at $39.00. CBD Online warned, Mobile Innovations said it was on target and ERG announced another Swedish contract.

The Australian Industry Group and Price Waterhouse published the PMI for June, and the index showed a solid gain, with food, beverages, base metals, chemicals and petroleum products in the driving seat. The Group believes this result isn't enough by itself to indicate the manufacturing downturn is over

On Thursday, Australian investors awoke to the news the US Federal Reserve had cut interest rates by another 0.25 per cent. The Bureau of Statistics advised job vacancies had fallen 7.2 per cent in the May quarter to their lowest levels in two years. Adsteam Marine gave a warning that the analysts had been expecting, but not the market, which sold it down and it closed the week down 27c at $1.91. Micromedical Industries won its second US artificial heart patent, and closed the week up 13c at 90c. Electrometals warned, Forest Enterprises warned and Intellect Holding's smart cards were picked by Germany's leading petrol retailer.

On Friday, the Bureau of Statistics announced that new motor vehicle registrations fell 5.5 per cent in May after rising for the preceding two months. The Bureau also announced that private sector credit rose 0.8 per cent in May.

Also on Friday, Caltex warned and over the week it fell 10c to $1.63, Crane Group warned and ended at $7.15, down 1c. Amlink warned, Westfield and Westfield America Trust advised of a rosy outlook and Technology One advised of new contracts,

On Friday night, the US Commerce Department released the third revision of American gross domestic product, now reduced to 0.4 per cent for the March quarter. In other data, American corporate profits fell 7.2 per cent in the same quarter. The University of Michigan published its survey of consumer confidence, and for the first time this year, it shows a majority of consumers expect the American economy to grow over the coming year. The Chicago Purchasing Managers Index rose to 44.4 for June, an indication of increasing activity, while the employment index rose too.

Aussie Dollar

The Aussie dollar declined almost one US cent over the week - from last Friday's 51.64 US cents it reached 50.74 US cents by 4.00 pm yesterday.

SPI

The June SPI200 futures contract finished the week at 3,445, gaining 17 points.

Industrials

The S&P/ASX 200 Industrials index rose this week, gaining six points to 5,898.7.

Resources

The S&P/ASX Resources index gained 29 points over the week to close at 1,582.2.

Banks

The Bank Index closed the week up 207 points at 9432.7.

Gold

The Gold Index closed the week up 26 points at 832.5.

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