Reversal Of Trend On London Market

Press, Volume CVI, Issue 31079, 7 June 1966, Page 17

Reversal Of Trend On London Market

(N.Z PA. Reuter—Copyright)

LONDON. June 5.

There has been a complete reversal in the trend of London stock markets during the last week. After the previous week’s display of strength, markets reacted on a broad front, and virtually the whole of the rise was lost.

Gold shares were the only section to move against the trend. Many factors combined to reverse the previous rise. These were principally the continuing seamen’s strike, the sharp fall in the United Kingdom May gold reserves, the weakness of sterling, rising interest rates, the National Institute's call for a tougher incomes policy, and some poor company statements.

A certain amount of stock came out, but the total volume of selling was by no means heavy. On the other hand, buyers were much more cautious and gave little support to the market.

Gilts were unsettled, and persistent selling brought

widespread losses, ranging to about half a point. Industrials suffered an allround set-back, and many losses of Is or more were recorded. Company statements hit some shares-hard.

Among these. Coats Patons tumbled on its profit warning, and John Brown slumped on the forecast of a very substantial loss. Cunard receded on the chairman’s annual review, and other shipping shares eased under the influence of the seamen's strike. Carreras’s entry into the cigarette-coupon war brought sharp losses in tobacco. Insurance shares fell, but bank shares offered some resistance to the trend.

Gold shares were in demand, with both the finance houses and the producers moving ahead, but other mining shares were subdued. Oils sustained sharp falls, but rubbers and teas were a shade better where changed. Dollar stocks receded with Wall Street. Australian Government stocks eased with British gilts. National were firm in dull banks. Western Mining resumed their advance in quiet golds. New B H. were firm in base metals but R.T.Z. reacted. Ampol and Interstate moved up in oils.

Elsewhere, Australian Estates rebounded, B.H.P. advanced sharply and British Tobacco responded to their increased interim.