Diploma of Share Trading and Investment
Course Code: 69793

Analysts divided over share market's best week

Published in the Daily Telegraph, August 2008

by Andrew Carswell

AFTER months of indecision and bearish rumblings, the local sharemarket ended its most positive week since the false dawns of May.

The All Ordinaries index climbed another 1.4 per cent yesterday, capping off a much-needed week in the black which amounted to 3.9 per cent of gains.

Strong performances in the financial sector lifted the market, aided by another positive lead on Wall Street.

The S&P/ASX200 index was up 69.1 points, or 1.36 per cent, to 5135.6, while the broader All Ords advanced 72.2 points, or 1.4 per cent, to 5215.5.

But whether this week's rise is the start of gains or another dead cat bounce is yet to be seen, analysts say.

"This week it appears as though the market has finally decided on a direction and the good news is it is up," Wealth Within chief analyst Dale Gillham said.

'But the question on most peoples' mind is this just another short term run or is the upward move sustainable?

I believe in the short term it will continue to rise for the next one to four weeks before it moves down again. Right now the longer the move up in both price and time the better."

Macquarie Group ended a week from hell to finish up $1.96, or 4.66 per cent, at $44.04. It was followed up by Commonwealth Bank which added $1.30, or 3.16 per cent, to $42.40. ANZ added 41c to $16.61, Westpac 41c to $23.55 and NAB 50c to $24.50.

BHP Billiton was down 35c to $41.40, while its target Rio Tinto added $1 to $127.50.

It was a mixed day for retailers with Woolworths adding 21c to $28.36, while its rival, Coles owner Wesfarmers, fell 86c to $32.80.

Despite the oil price falling to $US115 a barrel, energy stocks were mostly bullish, with Woodside adding $1.88 to $63.05 and Oil Search gaining Ic to $6.

With Wall Street closed for a public holiday on Monday, low volumes will be the order of the day when trading resumes next week. All eyes will be on Tuesday's Reserve Bank rate decision, with market consensus tipping a 0.25 per cent cut.