News and a few blue chips help out the All Ords
Jan 16
Peter Kormendy
Australian stocks inched their way higher yesterday but gainers were limited largely to News Corporation and other select blue chips.
These stocks aside, the broader market was perceived as weaker, and many investors waited on the sidelines ahead of the Dr Martin Luther King national holiday in the United States.
The S&P/ASX200 Index ended 7.7 points, or 0.2 per cent, higher at 3250.9 points.
The All Ordinaries Index was 6.5 points, or 0.2 per cent, better off at 3195.1 points.
But broad gains were never really indicative of the wider market, particularly as the total value of trading was a lethargic $1.1 billion.
By themselves, News Corporation (up $1.20 to $17.70), Telstra (12¢ higher at $6.90) and Cable & Wireless Optus (up 13¢ to $3.63) accounted for a 53-point gain over the main index.
St George Bank was another standout, gaining 32¢ to $14.50. As the market finished just seven points ahead, the broader market notionally fell to a 46-point deficit.
"The market is looking fairly average, and is being driven only by News Corporation and the St George Bank," the head of trading at BT Funds Management, Mr Wayne Nicholls, said.
"The broader market looks weak, evidenced by some offshore selling."
News Corp gains stemmed from a weekend report from Merrill Lynch, upgrading full-year earnings forecasts.
Locally, the 7 per cent gain in News Corp's ordinary shares put it in line with trading in its American Depository Receipts on Friday.
The Merrill forecasts were not seen as the sole driver behind the gains, however.
Ausbil Dexia director Mr Paul Xiradis said: "We have seen some very significant moves over the past year favouring sectors such as property trusts and banking stocks which are now the ugly ducklings.
"The view going forward has the exposure away from these sectors towards last year's ugly ducklings, such as technology, media and telecommunications - News Corporation in particular."
Telstra was the top-traded stock on the bourse as investors fled to the relative security of Australia's largest telecommunications sector.
The company indicated yesterday the market would determine when its $18 billion internet protocol joint venture with Pacific Century CyberWorks would be floated amid speculation that poor investor sentiment had quashed plans to spin it off mid-year.
Cable & Wireless Optus had a rare positive day, fed largely by rumours surrounding a possible buyer for all, or possibly part, of Australia's No2 telco.
The favourable environment for TMT stocks failed to rub off yesterday on Mr Kerry Packer's majority-owned eCorp, which lost money for the first time as the company dived below its issue price. Shares fell 7¢ to $1.14 - 6¢ out of the money.
eCorp has been falling, in line with other tech stocks, since last February, when shares peaked at $8.60.
The earnings season got off to an early and promising start for two high-profile companies, as Woodside Petroleum and Harvey Norman announced results.
Retailer Harvey Norman said its sales for the six months to December 31 were $1.28 billion, but shares lost 6¢ to $3.75. On a like-for-like basis, sales were up 11.9 per cent on the same period the previous year.
Woodside, which is staving off a bid by the Royal/Dutch Shell group, said it was in an excellent position to take on further investments and that it aimed to step up its fight against Shell this week. Shares ended 2¢ lower at $14.56.
Still in the resources sector, shares in miner WMC rose 10¢ to $7.24 after it recorded across-the-board increases in metal production during 2000. However, it warned that demand for commodities lessened late in the year.
BHP fell 18¢ to $19.08 and Rio Tinto gained 8¢ to $29.
Of the main banks, the Commonwealth rose 13¢ to $30.88 but the National fell 26¢ to $28.38.
The ANZ slipped 14¢ to $14.16 and Westpac dropped 13¢ to $13.15.
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