AAP MARKETS WRAP for Monday, August 13 2001

AAP General News (Australia)
08-13-2001
AAP MARKETS WRAP for Monday, August 13 2001

MARKETS WRAP: Monday, August 13 2001




DOW JONES +117.69 10416.25 US2-yr bond up 2/32 3.70
S&P500 +6.73 1190.16 US10-yr bond up 11/32 4.99
NASDAQ -6.85 1956.47 US30-yr bond up 13/32 5.51
NIKKEI -19.50 11735.06 CRUDE Sep/$US +0.41 28.05
HANG SENG +49.04 11765.81 TSEG -75.82 4752.86
FTSE 100 +24.30 5427.2 GOLD US$oz +0.60 276.80
NZSE-40 +7.32 2048.03 COPPER/$US +11.5 1444.50
A/ORDS -14.30 3343.90 TIN/USt +105.0 3885.00
S&P/ASX200 -15.50 3401.30 LEAD/$USt +8.5 493.50
DAX -78.79 5433.49 ZINC/$USt +3.0 825.00
CAC-40 -42.28 4846.02 ALUMINIUM/$US +13.5 1371.50
$US/YEN *122.01 NICKEL/$USt +30.0 5285.00
$EUR/USD *0.8936 SILVER $USoz -0.072 4.145
$NZ/USD *0.4256
$AUD/USD *0.5133





* Still trading



Crude oil is the September contract price on the NYMEX. Gold is the December price
on COMEX. Silver is the September price on COMEX. Base metal prices are the afternoon
cash closing prices on the London Metal Exchange.

Overseas text sourced from Dow Jones Newswires.



SYDNEY, Aug 13 AAP - In NEW YORK, blue chip stocks rose Friday after a government report
signalled inflation appeared under control.

However, the big advance led few to believe that Wall Street has suddenly become optimistic
about an economic turnaround.

The Dow Jones industrial average rose 117.69 to 10,416.25. The Standard & Poor's 500
index climbed 6.73 to 1,190.16, while the Nasdaq composite index was down 6.85 at 1,956.47.



In LONDON, shares finished higher Friday, although the close was well off the session's
highs after US economic data came in below expectations.

The FTSE 100 closed up 24.3 points, or 0.4%, at 5427.2.

The US. July headline producer price index came in lower than expected, confirming the
US. economy is some way off recovery.



In FRANKFURT, stocks fell on Friday, with the the Xetra DAX ending down 78.79 points at 5433.49.



In PARIS, French stocks ended lower Friday. The benchmark CAC 40 index of the most
heavily traded stocks closed down 42.28 points at 4846.02 points.



In TOKYO, the Nikkei fell 19.5 points to close at 11735.06.



In HONG KONG, Hong Kong stocks closed slightly higher Friday, snapping a six-session
losing streak.

The blue-chip Hang Seng Index edged up 49.04 points, or 0.4 percent, finishing at 11,765.81.

On Thursday, the index had slumped 241.24 points, or 2.0 percent, to close at a two-year
low.



In WELLINGTON, the sharemarket made a small gain despite gloom prevailing in major markets.

The NZSE-40 capital index ended 7.32 points ahead at 2048.03 on slim volume of $50.1 million.



In SYDNEY today, the stock market is expected to open higher following strong gains
on Wall Street on Friday.

The local market closed lower on Friday, dragged down by a weaker resources sector and
falls by heavyweights Brambles and National Australia Bank.

The benchmark S&P/ASX 200 index lost 15.5 points to 3401.3 while the all ordinaries
index was down 14.3 points at 3343.9.

Stocks likely to be of interest today include Normandy, with Normandy Mt Leyshon to
report its full year results. Pracom Ltd, Paperlinx Ltd and Jupiters Ltd will also release
their full year results.

The Reserve Bank of Australia is due to release its quarterly statement on monetary policy.

On the Sydney Futures Exchange, the September SPI 200 futures contract was four points
higher at 3408.0 on volume of 660 contracts.





COMMODITIES



In LONDON, three-month base metals on the London Metal Exchange ended the late kerb
mostly higher Friday as the market corrected its oversold conditions after the recent
slide, dealers said.

Dollar weakness Thursday helped to stimulate a price recovery which lifted much of
the complex off the lows of Thursday morning. The move also encouraged a bout of short
covering and speculator buying which pushed prices up to the intraday highs.

Aluminium managed to break resistance at $1,400/ton, but a lack of follow-through buying
dragged prices lower for the close.

Copper also managed to rise but was failed to break resistance at $1,476/ton after buying
dried up, and speculator selling emerged once again.

Both the bellwether metals were again hit by rises in stocks at LME warehouses of 2,650
tons for copper and 4,050 tons for aluminium.

Nickel came close to testing the recent low at support of $5,225/ton, with speculators
keen to sell, but light, forward consumer buying helped to limit the losses.

Tin managed to continue its climb for the third consecutive day but was capped short
of resistance at $4,000/ton.

Despite the base metal complex's correction higher over the last two days, dealers and
analysts still haven't changed their bearish short-term outlook.

"This rally is only a mild correction that will probably lead the way for further falls
to new lows in the next few weeks," another dealer said.



In NEW YORK, precious metals were trading mostly higher late Friday, with gold futures
rallying early on follow-through fund buying, stalling in front of heavy resistance and
giving back most of their gains, traders said.

"The funds that were buying over the last couple days stopped," one trader said.

"People realised this - people who had been buying with them liquidated before the
weekend. That's why we dropped $3," he explained.

December gold on the Comex division of the New York Mercantile Exchange finished trading
60 cents higher at $276.80 a troy ounce.

Weakness in the U.S. dollar, magnified by a bearish beige book report from the Federal
Reserve Wednesday, sparked the more-than-$5 rally Thursday in gold.

Other traders had predicted the rally couldn't be sustained while gold lease rates were
as low as they are - about half a percent for the 30-day rate - and while jewelry demand
was largely absent from the market.

Silver prices on Comex followed gold higher, with the September contract cresting at
$4.24 a ounce before coming down as gold slid back, ending 7.2 cents lower at $4.145 an
ounce.

Leonard Kaplan, president of Prospector Asset Management in Evanston, Ill., speculated
its early gains may have been an attempt to move closer to the $4.25 strike price ahead
of options expiration Friday afternoon.

But the bank trader disagreed.

"It wasn't option people selling on the way down. It was people who were long liquidating
as gold went down," he said. "Silver didn't belong up there. Fundamentally, silver should
be lower. There's plenty of it around."

He pegged support for September between $4.11 and $4.12 an ounce, the area it's held
a couple times this week.



In NEW YORK, several bullish factors combined to trigger a powerful rally in energy
futures at the New York Mercantile Exchange Friday, lifting crude oil and petroleum products
sharply higher.

Front-month September crude futures closed up 44 cents at $28.10 after rising as high
as $28.42 a barrel but failing to breach a key technical hurdle.

September gasoline prices jumped more than 3.00 cents to a seven-week high of 81.20
cents a gallon before easing back to close at 80.00 cents, up 2.07 cents.

September heating oil gained 86 points to 74.50 cents a gallon after setting an intraday
high of 75.30 cents a gallon.

Final settlement prices weren't in yet.

Analysts cited rising tensions in the Middle East, US-UK air strikes against Iraqi defence
sites and a more optimistic global oil demand forecast by the International Energy Agency
as catalysts for the Friday's rally.

"All those things are playing into it," said Chris Schachte, an analyst at GSC Energy in Atlanta.

Nearly 20 US and UK attack planes, supported by about 30 electronic warfare and other
aircraft, bombed three defence sits in southern Iraq early Friday, officials said.

It was the largest airstrike against Iraqi defence sites since February and came amid
increased efforts by the Iraqi military to shoot down allied pilots.

Tension in the region tends to make oil traders jittery, but analysts said the current
violence is unlikely to turn into all-out war or lead to a disruption of oil supplies.

Prices also received a lift after the IEA, the energy watchdog for the West, said global
oil demand in 2001 will be slightly higher than previously forecast.

In its monthly oil report released Friday, the IEA said it now expects global oil demand
to rise to 76.4 million barrels a day in 2001, compared with its last forecast of 76 million
barrels a day and last year's demand of 75.9 million barrels a day.





INTERNATIONAL NEWS



PITTSBURGH - Alcoa, the world's largest aluminum company, revised its second quarter
earnings below what the company previously announced and blamed customer bankruptcies
for the adjustment.



MOSCOW - Russia's 2002 budget is set to introduce sharp
increases in public sector wages but will succeed in reducing inflation to
around 10 percent, Finance Minister Alexei Kudrin predicted Sunday.



KIRYAT MOTZKIN, Israel - A Palestinian suicide bomber killed himself and wounded 15
people at a restaurant in northern Israel Sunday and Israeli soldiers shot dead a Palestinian
child in a firefight in the West Bank.



JERUSALEM - Israeli Prime Minister Ariel Sharon has given Foreign Minister Shimon Peres
the go-ahead to hold talks with the Palestinians on a halt to 10 months of bloodshed,
a senior Israeli political source said Sunday.



JAKARTA - Prime Minister John Howard's goodwill visit to Indonesia starts today with
official talks with President Megawati Sukarnoputri that are expected to include the tough
issues of Aceh and Irian Jaya.



NATIONAL NEWS



SYDNEY - Couriers across NSW will today begin ignoring Australian Tax Office (ATO)
and federal government freight in a bid to force changes to draft tax rulings.



SYDNEY - Australian building industry activity will have experienced its worst slump
in 25 years in 2000/01 but recovery should be swift, consulting firm BIS Shrapnel has
forecast.



CANBERRA - The federal government is considering an overhaul of tax laws to keep Australia's
billion-dollar film industry alive.



SYDNEY - Cable & Wireless Optus Ltd will use the start of mobile phone number portability
to assault Telstra's domination of the business market, it was reported today.



SYDNEY - Australian entrepreneur Dick Smith is reportedly planning a grassroots political
campaign in north-west NSW to attack Deputy Prime Minister John Anderson.





STOCKWATCH for Monday, August 13





CCL - COCA-COLA AMATIL LTD - UP 25 CENTS AT $5.55

Soft drink bottler Coca-Cola Amatil appears to be on track to boost full year profits
with strong first half earnings growth at its Australian, Oceania and South Korea divisions.





BGN - BRESAGEN LTD - UP 11 CENTS AT 94 CENTS

AGT - AUTOGEN LTD - UP FOUR CENTS AT 99 CENTS

A decision by US President George W Bush to limit government funding for stem cell
research has sparked a rally in shares of Adelaide-based biotech BresaGen.

Meanwhile, the Joseph Gutnick-backed biotech firm Autogen said it has identified a
key gene associated with diabetes.





AAC - AUSTRALIAN AGRICULTURAL CO LTD - CLOSED AT 99 CENTS

Shares in Australian Agricultural Co failed to live up to expectations of a strong
debut today, opening trade at a slight discount.





BIL - BRAMBLES INDUSTRIES LTD - DOWN 59 CENTS AT $10.21

Arguably the most positive move in Brambles' history has seen its share price plummet
this week on its $19 billion dual-listing and merger with Britain's GKN plc.





OPS - OPSM PROTECTOR LTD - UP 17 CENTS AT $3.11

Shares in Australia's largest optical retailer OPSM Protector closed more than five
per cent higher Friday as investors rejoiced that the company had sold the last of its
non-optical businesses.





TLS - TELSTRA CORP LTD - DOWN SIX CENTS AT $5.17

SEV - SEVEN NETWORK LTD - DOWN 14 CENTS AT $7.32

Pay television group Foxtel has lost a crucial court decision with its 50 per cent
share holder Telstra Corp having to open up its cable platform to rival Seven Network.





WPL - WOODSIDE PETROLEUM LTD - DOWN 14 CENTS AT $14.40

Royal Dutch/Shell has no immediate ambitions to revisit its takeover attempt for Woodside
Petroleum but the pair are in talks to move their relationship forward.





FOA - FOODLAND ASSOCIATED LTD - UP NINE CENTS AT $12.00

Shares in Foodland have surged to their highest level in more than two years after
the company reported a 3.5 per cent increase in total group sales for the year.





LAS - LASSETERS CORP LTD - UP 39.5 CENTS AT 50 CENTS

Online casino group Gorcorp, now trading under the Lasseters Corp banner, has made
a stunted return to the boards of the ASX with just one trade since resuming at the open.





NFD - NATIONAL FOODS LTD - DOWN TWO CENTS AT $2.13

Woolworths is lifting the price of milk it pays to its suppliers by five cents a litre
from next month.

One analyst welcomed the price rise saying milk suppliers like National Foods and Dairy
Farmers will benefit by the Woolworth's decision.

"They will share in some of it and it will lead to higher profits - they will just
raise their prices across the board," he said.

National Foods, Australia's largest fresh milk processor with an annual turnover of
$1 billion, produces its own branded products such as Pura Milk, Yogo and Yoplait.



Karen Michelmore (02) 9322 8734.

AAP

KEYWORD: MARKETS WRAP

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