Wall Street's tsunami set to flood Australian bour

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    Wall Street's tsunami set to flood Australian bourse
    By Eli Greenblat
    July 22 2002

    The wave of negativity that struck Wall Street on Friday night is set to hit the Australian sharemarket this morning, as stockbrokers and investors brace for potentially billions of dollars to be wiped from the value of local stocks.

    Market heavyweight stocks including National Australia Bank, Telstra and Commonwealth Bank are expected to hit a blizzard of selling pressure, with analysts tipping the S&P/ASX 200 Index to fall between 1 per cent and 5 per cent.

    News Corporation is also bound to drag the index down, after a slide in US media stocks drove the media giant's Wall Street-listed American Depository Receipts 5.1 per cent lower on Friday.

    The Dow Jones Industrial Average slumped 4.64 per cent on Friday, pushed lower by investor reaction to a US Food and Drug Administration probe into drug giant Johnson & Johnson. Wall Street took European markets down with it, as bourses in Britain, Germany and France fell by as much as 5.4 per cent.

    An equivalent 5 per cent dip on the Australian sharemarket would equate to more than $30 billion in shareholders' value being destroyed.

    Assirt Equities chief strategist John Banos said yesterday he was very concerned with events in the US, with one of the biggest bubbles in financial markets now bursting.

    But Mr Banos said the Australian economy and sharemarket were in a stronger position than their US counterparts.

    "Sentiment in Australia will be affected by what's happening overseas but there's no bubble here in the market, there's no doubt about that and we have seen experiences before where overseas bubbles have burst and Australia has done OK," Mr Banos told Channel Nine's Business Sunday.
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