how come the asx market is so stupid, page-4

$800 billion lost in one year and the market could now fall between 2900 and 3200.

November 19, 2008 - 4:36PM SMH

Australian shares have lost half their value in just over a year, before sinking even lower today.

The All Ordinaries hit an all-time high of 6873.2 points on November 1, 2007. By yesterday it had lost half its value, or $804 billion.


In late trade today, when it dipped to a low of 3438.8, the S&P/ASX200 came near to halving its value since last year's high.

But at the close, the S&P/ASX200 index had recovered somewhat to end down 0.7%, or 23.6 points, at 3499.6, the lowest close since June 21, 2004, while the broader All Ordinaries index was down 0.9%, or 29.9 points, to 3483.2.

Early gains didn't last


The market sank today despite a late rally on Wall Street overnight, which sparked early gains on the local market. But shares quickly reversed trend and stayed in the red until the close.


Today, short selling of non-banking shares was permitted again, after a two-month ban imposed by the Australian Securities and Investment Commission to stabilise markets.

Commenting on the losses over the past 12 months, Argonaut Securities senior dealer James McGlew said: "I think most people would be thinking it feels like a hell of a lot more than half."

"Psychologically people would be feeling they lost more than half their money some time ago.

"A number of months ago when the market was hitting around 4600, we called 3400. We thought we were being overly pessimistic."

More gloom ahead


Mr McGlew now says the market will play itself out between 2900 and 3200.

"We could see it perhaps bounce a couple hundred points but I don't think it would change the overall trend.

"It's also interesting to note the small rallies we've had peter out very quickly."

"There's not a lot of cash sitting on the sidelines to be thrown at this."

Mr McGlew said the commentary from the big three US car makers overnight was a "sort of trigger" for the kind of drops seen lately.

"It sounds as if they're holding a gun to the head of the US government, saying 'If you don't bail us out this economy is completely cactus. You'll see things unfold here like you've never seen before."