Market's bulimia back to gluttony stage
- 18 April, 2000 12:01
Local investors were breathing a little easier this morning as the market rallied in response to a lift in the Nasdaq overnight.
After yesterday's decimation, which wiped $36 billion off the value of the local market, the ASX All Ords lifted 2.36 per cent, or 68.9 points, to 2988.9 in the first half-hour of trade today.
Across the board local tech stocks were up -- some almost 20 per cent in morning trade.
Overnight the tech-heavy Nasdaq lifted 217.87 points, or 6.56 per cent, to close at 3539.16. Wall Street was also up with the Dow Jones Industrial Average climbing 276.74 points, or 2.69 per cent, to 10,582.51.
This morning's rally was also pre-empted by a surge in Share Price index futures contracts which were up more than 80 points, or 2.8 per cent, during overnight trading on the Sydney Futures Exchange.
The head of technology investment banking at Ord Minnett, Chris Smith, said yesterday's market consolidation was something that "needed to happen". Smith said the market's volatility, however, was not over yet. He said all eyes would still be on the Nasdaq tonight which continues to be the catalyst for movements across international markets.
"There is so much volatility in the markets that everyone agrees that it was time for consolidation," he said. However, just how the long the market would rise or the next time it would fall were questions that only time could answer.
Smith expected investors would re-evaluate the fundamentals of businesses into which they were putting their money. However, he said just because prices were currently low, market volatility was still a factor that investors should consider before taking advantage of what might look like a bargain.
Among the tech stocks having a better day this morning were BMC Media, Davnet, Liberty One, Kaz Computers, Technology One, and Spike Networks -- all up around 20 per cent on yesterday's close.
The New Zealand Stock Exchange has also recovered this morning and is up about 2 per cent.