Market report
CUSTOS
The breaks in this two year old bull market, when they have come, have been abrupt. To see the Financial Times index down 23 points, or 4 per cent, in a week is enough to shake in- vestors' nerves. Much of last week's selling did, in fact, come from private shareholders, and at one stage it seemed to be snowballing. But on Tuesday of this week the institutions came back into the market as buyers, and this was enough to push prices back upwards. Market psy- chology now gives investors a difficult guessing game. When the next break comes, will the institutions be satisfied with a 4 or 5 per cent shakeout, or will they let things slide further before they look for bargains?
The FT index does not include Australian stocks, where the really spectacular tumbles have been taken. The Australian boom had gone so far and fast that brokers in Sydney and Melbourne were hopelessly behind with their paperwork, and there have been delays in the actual delivery of stock certificates. That is ,a sure recipe for trouble, and sure enough some Australian broking firms are said to be in diffi- culty.
Insurance shares have been dampened by the flooding in the south-east. Vehicle and General, though, has come up with healthy half-time figures: premium income is f2 million higher at £9.6 million, and investment income and broking profit have both almost doubled. Courage fore- casts no change in profits: breweries this year have had much to contend with. Their earnings can still be bought at two thirds of the market average.
Previous page
