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Market barometer: Prices and volumes lift as sharemarkets show rising signs of life

Friday 21st July 2000

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The sharemarket is starting to show signs of life. Prices and traded volumes are lifting.

Overseas, the signs for equities are encouraging. The US sharemarket is looking robust with just one month to go before the US Federal Reserve's federal open markets committee (FOMC) convenes to discuss interest-rate settings. The FOMC's meeting is tipped to be its last one likely to hike interest rates before the US presidential election.

Main US indices are picking up. The tech-rich Nasdaq has bullishly beaten resistance at 4000 points. The Dow Jones industrials index has flicked up from support at 10,500 and may test 11,000. Its companion index, the Dow Jones transportation, has jumped up from 2800.

The NYSE composite could be an index to watch. Since April it has been capped at around 660 but looks likely to beat that level. A breakout by the index would be a strong signal for US sharemarkets.

Other sharemarkets appear firmer. London's FTSE-100 has moved above 6400 and may shift beyond 6500. Australia's ASX-100 has had a solid run, hitting the 2700 mark, and is perhaps in need of a breather. The US dollar is still strong against the yen and the euro, while the kiwi seems about to suffer another downturn.

Local indices have risen. There is a rally in the smaller companies capital index, which has cleared important resistance at 5200. There may be some position-building in companies that will replace disappearing FCL letter stocks in the top 40. The top-40 capital index has started to tackle April's overhead resistance at about 2150.

Many large capital listings are up. The three recent expatriates are interesting for their diversity of behaviour. Brierley Investments has nudged up a cent or two to the 35cps area. Nufarm (formerly Fernz) is listless at about 425cps. Lion Nathan has rocketed since moving head office to Australia, having zoomed up about 150cps since April to 500cps.

Of the local yokels, Air New Zealand class B is ahead at the 240cps mark. Auckland International Airport has been struggling to beat 270cps. Contact Energy is on the move again, testing the 290cps zone. Fisher & Paykel is again trying on the 700cps resistance mark.

Ports of Auckland looks about to re-rate as it floats away from earlier lows and heads toward the 440-450cps band. Sky City is another bouncer, skipping up to about 700cps. Carter Holt Harvey is headed back toward 200cps. Telecom is battling away at 750cps but may have given the market some inkling where it is headed next by staking its claim to the mobile phone internet market.

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