News quote - Brokers recommend small-mid-caps as s

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    "Brokers continue to recommend small and mid-cap equities as safe-haven investments." What???

    "people are moving away from the defensive plays to more of the growth-orientated ones"

    Australian stocks flat as investors dump banks
    13:09, Thursday, 9 May 2002

    (Updates to mid-session)
    By Michael Smith

    SYDNEY, May 9 (Reuters) - The Australian stockmarket retraced an early rally to trade flat by mid-session on Thursday as investors dumped banks after a sell-off in U.S. Treasuries overnight pushed up bond yields.

    The local bourse failed to match Wall Street's rally
    overnight, although heavyweight Telstra was inspired by a surge in the U.S. Nasdaq .

    Australia's biggest bank, National Australia Bank , shrugged off early gains to slip 1.0 percent to A$34.68 despite beating market expectations with a first half net profit of A$2.26 billion.

    "The banks are feeling the brunt of high bond yields ...
    people are moving away from the defensive plays to more of the growth-orientated ones," Nomura Australia equities strategist Eric Betts said.

    The benchmark index was up 2.6 points, or 0.1 percent, to 3,342.5 firmer at 3341.5 by earlier afternoon, all but wiping out an early 0.6 percent rally to 3,363.1.

    Volume was A$1.06 billion ($573 million).

    Australia's other major banks also fell as Australian bond
    futures extended their slide to a fresh two-week low on a surge in U.S. stocks and fears of more rate hikes following Wednesday's Reserve Bank cash rate increase.


    Westpac slipped 0.9 percent to A$16.13 despite earlier announcing a A$800 million share buy-back, ANZ lost 1.3 percent to A$18.88 and Commonwealth dived 1.7 percent to A$33.08.

    Telstra was 0.6 percent stronger at A$4.72 in heavy trade. It hit an early high of A$4.78 after U.S. tech stocks soared overnight on an upbeat profit result from Cisco Systems .

    The market was also buoyed by heavyweight News Corp , which hit a 30-month low earlier in the week. Wall Street's rally helped lift the media group's Australian shares up 2.2 percent to A$12.24.

    Global miner BHP Billiton was one of the few key movers to hang onto early gains. Its shares were 1.3 percent higher at A$11.27 after the price of oil soared overnight.

    AMP also edged off an eight-month low, gaining 1.7 percent to A$16.98 after announcing it had found a buyer for its Henderson Private Asset Management.

    Over-sold blue-chips also continued to claw back recent losses although retailer Coles Myer dipped back into negative territory, retreating 0.5 percent to A$6.34.

    Coles shares lost 20 percent of their value earlier this week after issuing a shock profit warning.

    Brokers continue to recommend small and mid-cap equities as safe-haven investments.

    "The niche, mid/small cap sector is characterised by
    companies which are starting to hit their serious growth phase, giving investors access to expanded opportunities," said Reub Hayes, chief executive of funds manager Ausbil Dexia.


    ((Michael Smith, Sydney newsroom 61-2 9373-1800,
    [email protected]))
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