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Australian stocks close lower but AMP rallies

SYDNEY: The Australian share market closed modestly lower on Thursday, saved from a sharper fall by an afternoon rally in funds management and insurance giant AMP Ltd.

Traders said the market was a little unsettled by investors positioning their holdings ahead of options expiry on Thursday. Profit taking in heavyweight News Corp and some of the larger bank stocks also weighed on the market, they said.

The benchmark All Ordinaries Index finished down 5.6 points at 3,106.9.

AMP was the most talked about stock on the day, following the release of its 1999 annual result, which included a pre-abnormal net profit of A$1.049 billion (US$650 million), in line with market expectations.

The bottom line was a loss of A$424 million, due mainly to the writedown by almost A$1 billion of AMP's troubled insurance unit.

Hartley Poynton broker Dirk Van der Struyf said the market's initial positive reaction to AMP's result was confirmed later in the day after the company had briefed analysts.

"The market has now had time to crunch the numbers and has worked out that the company, under Paul Batchelor (chief executive officer) is doing better," said Van der Struyf.

After rallying to an intraday high of A$15.56 its highest since on February 4 the stock settled at A$15.071, up 61.7 cents.

Elsewhere in the market, major banking issues were pressed lower, with the exception of National Australia Bank, which rose nine cents to A$19.99.

And, despite rallies in mining giants and Rio Tinto, the resources sector continued to suffer from a flow of funds into telecommunications and technology stocks, traders said.

"The market is still quite divided between media and tech stocks and the so-called older economy areas such as resources and industrials," said Colonial Stockbroking's head of institutional sales, Chris Walker.

Logistics group Brambles Industries was in the small group of strong performers on the day. Investors were still buying the stock a day after it reported a 10.4 percent rise in first half net profit before one-off. The stock closed up A$2.015 or 5.3 percent at A$40.015.

Turnover on the wider market was A$1.6 billion.

Declining stocks outpaced advances by a ratio of ten to nine, while about 21 percent of stocks traded remained steady.AMP was the most talked about stock on the day, following the release of its 1999 annual result, which included a pre-abnormal net profit of A$1.049 billion, in line with market expectations. The bottom line was a loss of A$424 million, due mainly to the writedown by almost A$1 billion of AMP's troubled GIO insurance unit.

Hartley Poynton broker Dirk Van der Struyf said the market's initial positive reaction to AMP's result was confirmed later in the day after the company had briefed analysts.

"The market has now had time to crunch the numbers and has worked out that the company, under Paul Batchelor (chief executive officer) is doing better," said Van der Struyf.

After rallying to an intraday high of A$15.56 its highest since on February 4 the stock settled at A$15.071, up 61.7 cents.

Elsewhere in the market, major banking issues were pressed lower, with the exception of National Australia Bank which rose nine cents to A$19.99.

And, despite rallies in mining giants and Rio Tinto, the resources sector continued to suffer from a flow of funds into telecommunications and technology stocks, traders said.

"The market is still quite divided between media and tech stocks and the so-called older economy areas such as resources and industrials," said Colonial Stockbroking's head of institutional sales, Chris Walker.

Internet page design group Sausage Software failed to excite investors despite posting an interim net profit of A$1.9 million, almost three times the previous corresponding result. The stock closed down 4.4 cents to A$5.306.

Victorian-based gaming company Tabcorp also failed to impress with its A$85.6 million interim profit, up from A$71.6 million previously. The group's share price closed down 5.4 cents at A$2.36.

However, logistics group Brambles Industries was one company that broke the profits trend. Investors were still buying the stock a day after it reported a 10.4 percent rise in first half net profit before one-off. The stock closed up A$2.015 or 5.3 percent at A$40.015.

Turnover on the wider market was A$1.6 billion.

Declining stocks outpaced advances by a ratio of ten to nine, while about 21 percent of stocks traded remained steady.-Reuters