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Austrian stocks

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VIENNA: Austrian shares closed down, failing to recover above the 1,020 support level despite a rate cut by theh Budnesbank and Austria's central bank.

The ATX index of blue-chip stocks closed down 6.54 at 1,019.92, above the day's low of 1,016.97. The September futures contract dipped 4.6 points to 1,026.50 with 1.748 contracts changing hands.

Traders said Austria would probably follow an upward trend on Friday which was already noted at the Frankfurt stock exchange after the Bundesbank slashed rates.

Germany's central bank cut its discount and Lombard rates by 50 basis points each to 3.50 and 5.50 percent respectively.

The Austrian National Bank quickly followed suit, lowering its key discount rate to 3.5 percent from 4.0 percent and the Gomex interest rate to 4.35 from 4.45 percent.

"I cannot understand why the market has not reacted strongly to the rate cut," one trader at the Vienna bourse said. "The Germans reacted to it, but Austrians have not. I don't get it."

While traders uniformly expected upward moves early on Friday, views differed on the impact the rate rise would have.

"It may be that the Bundesbank impetus and the stronger dollar will push us back into the technical triangle formation and push us up to 1,040 or 1,050," one dealer said.

"Breaking through support doesn't mean it'll keep going down," he said. "There is a good amount of client money lurking in the depths. You saw today that at a certain point between 1,017 and 1,019 there was some buying."-Reuter