Oil surge hints at selective buoyancy By Richard Webb September 26, 2004 The Sun-Herald
Energy stocks such as BHP Billiton and Woodside Petroleum are expected to move higher tomorrow after crude oil surged to a record closing high of $US48.83 a barrel in New York yesterday.
But with shares on Wall Street finishing generally mixed, stock experts predict the local sharemarket as a whole will be little changed.
Even so, ABN Amro chief equity strategist Gerard Minack believes the Australian sharemarket still has the legs to move to another record high this week if Wall Street holds steady.
"With a new all-time high for crude, and prices up 7 per cent for the week, not surprisingly on Wall Street the stand-out sector was energy and some other commodity areas," he said.
"But it was a down week overall and I expect our open on Monday will be ... not too different from where we closed on Friday."
Mr Minack said the Australian sharemarket had shown itself to be resilient in the past week and he expected this to continue; the ASX 200 finished 0.2 per cent down last week, the Dow fell by 2.3 per cent.
"We've been far more resilient than Wall Street, and have been able to grind out a new high on a fairly regular basis," he said. "We might not be going too far on Monday but I think we will still keep grinding higher next week unless Wall Street takes a big dip."
Mr Minack said the Australian market had been supported by the bumper dividends declared in the latest profit-reporting season. He said many shareholders seemed to be reinvesting their dividends in shares and this was providing solid buying support.
He said the August retail sales on Wednesday would be important because the previous two monthly sales readings had fallen well short of forecast.
STU Price at posting:
0.0¢ Sentiment: LT Buy Disclosure: Held
