$800b lost in a year

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This was published 15 years ago

$800b lost in a year

By Chris Zappone

Australian shares have lost half their value in just over a year, before sinking even lower today.

The All Ordinaries hit an all-time high of 6873.2 points on November 1, 2007. By yesterday it had lost half its value, or $804 billion.

In late trade today, when it dipped to a low of 3438.8, the S&P/ASX200 came near to halving its value since last year's high.

But at the close, the S&P/ASX200 index had recovered somewhat to end down 0.7%, or 23.6 points, at 3499.6, the lowest close since June 21, 2004, while the broader All Ordinaries index was down 0.9%, or 29.9 points, to 3483.2.


The market sank today despite a late rally on Wall Street overnight, which sparked early gains on the local market. But shares quickly reversed trend and stayed in the red until the close.

Today, short selling of non-banking shares was permitted again, after a two-month ban imposed by the Australian Securities and Investment Commission to stabilise markets.

Commenting on the losses over the past 12 months, Argonaut Securities senior dealer James McGlew said: "I think most people would be thinking it feels like a hell of a lot more than half."

"Psychologically people would be feeling they lost more than half their money some time ago.

"A number of months ago when the market was hitting around 4600, we called 3400. We thought we were being overly pessimistic."

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Mr McGlew now says the market will play itself out between 2900 and 3200.

"We could see it perhaps bounce a couple hundred points but I don't think it would change the overall trend.

"It's also interesting to note the small rallies we've had peter out very quickly."

"There's not a lot of cash sitting on the sidelines to be thrown at this."

Mr McGlew said the commentary from the big three US car makers overnight was a "sort of trigger" for the kind of drops seen lately.

"It sounds as if they're holding a gun to the head of the US government, saying 'If you don't bail us out this economy is completely cactus. You'll see things unfold here like you've never seen before."


Among the banks, ANZ was up 78 cents, or 6%, to $13.82 at the close, while the Commonwealth was up 83 cents, or 2.8%, to $30.93.

NAB was up 53 cents, or 2.8%, to $19.68 and Westpac was up 70 cents, or 4.5%, to $16.25.

The investment banks were mixed. Macquarie Group continued yesterday's rise, adding $1.16, or 4.8%, to $25.16, while Babcock & Brown was down 6 cents, or 19%, to 25 cents. Babcock shares fell as much as 27% in early trading after it announced a strategic review this morning.

Suncorp-Metway was up 58 cents, or 9.2%, to $6.90 and QBE Insurance was down $1.51, or 6.3%, to $22.34.


The big miners all opened higher before changing direction, withBHP Billiton
down $1.00, or 4.1%, to $23.20 at the close,Rio Tinto down $2.10, or 3.1%, to $65.90 andFortescue Metals losing 25.5 cents, or 15.8%, to $1.35.5.

Energy stocks were mixed. Woodside Petroleum was down $1.06, or 3%, to $33.93 and Santos was up 7 cents, or 0.5%, to $12.82.

Gold stocks were slightly lower after spot gold fell slightly overnight to trade recently at $US738.27. Lihir was down 6 cents, or 3.4%, to $1.69 and Newcrest was down 4 cents, or 0.2%, at $18.95.

Among the retailers, Woolworths was down $1.15, or 4.4%, to $25.10, Wesfarmers was up 51 cents, or 2.8%, to $18.72 and Harvey Norman was down 12 cents, or 5.2%, to $2.18.

Media stocks were lower. Fairfax was down 18.5 cents, or 11.74%, to $1.40, while News Corp was down 19 cents, or 1.7%, to $10.99.

The airlines were mixed - Qantas was down 4 cents, or 1.8%, to $2.19 and Virgin Blue was up 1 cent, or 2.7%, to 38 cents.

Shopping centre operator Westfield was up 29 cents, or 2.1%, to $14.08 and Mirvac Group was up 10 cents or 6.9%, to $1.55.

The telcos were higher, with Telstra up 2 cents, or 0.5%, to $4.10 and SingTel, owner of Optus, also up 2 cents, or 0.8%, to $2.47.

One of the biggest laggers was CSR, which was down 30 cents, or 17.4%, to $1.42 after it announced the result of its capital raising.

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On Wall Street, the Dow Jones Industrial Average closed up 151.1 points, or 1.8%, at 8424.75 after zig-zagging through the session. The Standard & Poor's 500 Index gained 8.36 points, or nearly 1%, at 859.11. The Nasdaq Composite Index closed just over the line the black 1.2 points higher, or 0.08%, at 1483.27.

The Australian dollar was recently trading recently at 64.42 US cents, 62.18 yen and 51.07 euro cents.

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