Sharemarket plays follow the leader

The sharemarket surged almost 2 per cent yesterday as resources and bank stocks jumped into positive territory following strong gains on Wall Street late last week.
Fat Prophets executive director Angus Geddes said the strong economic data from the US had helped allay fears about inflation in Australia.
The ASX 200 index rose 76.7 points to 4459.7 while the All Ordinaries climbed 72.2 points to 4412.7.
Bell Potter senior adviser Stuart Smith said the local bourse had followed the strong US lead.
"I don't think we can help ourselves by going against the US market and, technically, we've made a little break on the upside [although] I'm not convinced the volatility is finished," he said.
BHP Billiton jumped 65c to $20.75 while Rio Tinto rose $1.37 to $56.31.
Energy stocks also surged, with AGL jumping 64c or 4.41 per cent to $15.14 after announcing plans to split its retail energy and infrastructure businesses into two companies.

Santos was up 24c to $11, Woodside Petroleum rose 80c to $31.60 and Origin Energy climbed 27c to $6.72 after posting lower output but higher revenue for the September quarter.
In banking, ANZ rose 36c to $23.55, NAB added 32c to $33, CBA firmed 38c to $38.88 and Westpac climbed 37c to $20.75. Westpac is tipped to announce a $500 million share buyback and a record annual profit this week.
Macquarie Bank put on $1.17 to $64.67 while Bendigo Bank climbed 18c to $11.54 after announcing that its first quarter trading was satisfactory as well as reaffirming its cash earnings forecast.
St George dipped 30c to $27.24 despite announcing a record annual net profit of $828 million, as investors reacted badly to tightening margins.
Publisher John Fairfax was up 11c to $4.12 while PBL rose 14c to $16.12.
In the property sector, Westfield rose 33c to $16.61, Stockland added 11c to $6.11 and Lend Lease rose 8c to $13.62.
Retailer Woolworths climbed 33c to $16.33, while Coles Myer found 21c to $10.03.
Orica, up 21c to $19.12, and joint venture partner Exxon Mobil will sell the Australian plastics producer Qenos to China National Chemical Corp for an undisclosed sum.
Oil and gas explorer Red Fork Energy had a positive start to public life, listing at a small premium. The stock opened at 27c and closed at 25.5c compared to its 20c issue price.
Papua New Guinea's Lihir Gold jumped 6.5c to $1.75 after it reported a better than expected September quarter with record gold production of 193,031 ounces. This was above expectations of 190,000 ounces.

Correction over, now for Santa to provide bounce

Correction over, now for Santa to provide bounce

New York: Wall Street finally got some traction last week as investors took comfort in the latest economic data and looked for signs that the recent correction has run its course.
The Dow Jones Industrial Average gained 1.8 per cent for the week to close on Friday at 10,402.77, ending a six-week losing streak.
The S&P 500 broad-market index gained 1.6 per cent, its best showing in seven weeks, to 1198.41. The technology-heavy Nasdaq index was up 0.37 per cent to 2089.88.
As the markets prepared to close out a nightmarish October - with the sharemarket down 2.4 per cent for the month - many analysts were interpreting the recent action as traditional seasonal weakness that could lead to a year-end rally.
The sharemarket experienced a strong rally on Monday after the nomination of Ben Bernanke to replace Alan Greenspan as head of the Federal Reserve, on the assumption that he may be more stock-friendly.
The market gave back much of those gains by midweek but then staged a strong rally on Friday in response to a report showing a US growth rate of a stronger than expected 3.8 per cent.

"Sentiment could be reversing," said Stephen Auth at Federated Investments. "In the wake of hurricanes and soaring energy costs, investors had grown very gloomy, fuelling a sharp correction.
"October usually is a lousy month for stocks and professional investors know it. Year-end rallies are fairly common, too, something else professional investors know. With October nearing an end, market participants may have been positioning themselves for the Santa Claus rally they're hoping for."
The strong economic report could be a catalyst for the market to build on its gains, some analysts said.
Avery Shenfeld at CIBC World Markets said the report showed a resilient economy. "The weather huffed and puffed, but it couldn't blow the US economy down in the third quarter," he said.
"If storms took a percentage point or so off the economy's pace, the 3.8 per cent quarter showing for real GDP growth has to be considered strong."
Alfred Goldman at AG Edwards said the report showed strong growth and lower than expected inflation.
"This data shows that the rise in energy prices is not filtering into the broader economy and should dampen inflation fears," Mr Goldman said.
Paul Nolte at Hinsdale Investments remains cautious about betting on a late-year rally.
"If we look at the commitment of traders, the large speculators have been selling the market hard over the past four weeks and at the heaviest level in over two years," he said.
"While we expect some higher prices in the weeks ahead, we may be using any ensuing rally to lighten our positions as investors reassess the economic strength of the US."
The Federal Reserve is expected on Tuesday to lift its main rate by a quarter of a point for the 12th time in as many meetings, and issue an outlook on the economy.

Wall St woes take their toll

The sharemarket was hit by heavy selling on Friday after Wall Street fell for the third consecutive session.
CMC Markets senior dealer Phil Martin said markets worldwide were displaying increased volatility and Australia was no exception.
The ASX 200 index fell 50 points to 4383.0 while the All Ordinaries index lost 48.7 points to 4340.5.
"BHP Billiton suffered a double whammy of falling copper prices and some brokers cut their earnings estimates for the mining giant," Mr Martin said.
BHP was 39c lower at $20.10 while Rio Tinto lost 86c to $54.94.
Woodside slumped 60c to $30.80 despite a small rise in crude oil prices overnight on Thursday.
Mr Martin said trading was affected by US worries about the finances of General Motors. On Wall Street, the Dow Jones Industrial Average fell 115.03 to 10,229.95.
Aequs Securities institutional dealer Ric Klusman said he was surprised the market had not been hit harder. "We're coming up to the US Federal Reserve meeting and they're not making any rumblings about not tightening so I think that is one of the prevailing things that is holding over the market."

In the banks, CBA eased 4c to $38.50 despite announcing a $500 million share buyback at its annual general meeting. NAB fell 46c to $32.68, Westpac 2c to $20.38 and ANZ 18c to $23.19.
Adelaide Bank, which said at its annual general meeting on Friday it was aiming for 5 per cent of the mortgage market, fell 13c to $12.15.
Retailers fared little better, with Coles Myer losing 7c to $9.82 and Woolworths 10c to $16.
Paint manufacturer Wattyl fell 12c to $2.40 after saying it expects this year's first-half result to be lower than the same time last year.
Telstra, which will pay out $2.5 billion next week, fell 7c to $4.18.
Biota fell 8c to $1.80.
Babcock & Brown Wind Partners Group listed at a 20c premium to its $1.40 issue price and closed at $1.68. Tungsten and tin explorer Segue Resources, issued at 50c, opened at 55c and closed at 60c.
Hills Industries expects a record year despite rising costs, outgoing chairman Robert Hill-Ling said on Friday. The shares fell 3c to $4.60.

GM crisis rumours send equities way down south

GM crisis rumours send equities way down south

The Australian share market closed weaker yesterday following volatile trading fuelled by rumours that General Motors in the US was preparing to file for Chapter 11 protection.
The market plunged sharply as the rumour spread but rebounded after the speculation was negated within the US.
The ASX200 was 10.4 points lower at 4433 while the All Ordinaries dropped 11.4 points to 4389.2.
On the Sydney Futures Exchange the December share price index contract was 27 points weaker at 4428 on a volume of 15,946.
Patersons Securities private clients manager Steve Morris said it had been an average day, kicked off by a weak US lead overnight where high bond yields created fresh concerns about inflation and interest rates.
"We are probably pretty much in line with where we should be given the overseas action last night,"Mr Morris said. "It has been pretty mixed across the board and it is difficult to find clear winners around the place sector by sector."
He said the rumour that General Motors was in financial dire straits undermined confidence in the US economy, which could have seen the US market open sharply down.

At the end of local trading the major banks were mixed with National Australia Bank surging upwards 44 cents to $33.14 and Commonwealth Bank inching eight cents higher to $38.54.
Meanwhile, Westpac slid 10 cents lower to $20.40 and ANZ lost eight cents to $23.37.
Commodity prices pulled back overnight from recent gains taking the shine off some resource stocks.
BHP Billiton bucked the trend to find seven cents, pulling away to $20.49 as the miner posted record copper and nickel production for the September quarter with the assets of WMC Resources making a big impact for the first time. Rio Tinto was also tracking stronger, putting on 22 cents to $55.80.
Energy stocks stumbled with Woodside Petroleum shedding 63 cents to $31.40 and Santos losing 21 cents to $11.10.
The media sector was also weaker with Publishing and Broadcasting dropping 12 cents to $16.22 after the company said its gaming investments in Macau would pinch high rollers from its domestic casinos.
Fairfax also slumped 10 cents to $4.06 while News Corp slipped 15 cents lower to $20.15, with its non-voting shares following, losing 13 cents to $19.19.
Telstra gained four cents to $4.25 as it confirmed it was undertaking a review of its Hong Kong operations.
The retail sector lacked direction with Woolworths skipping 35 cents higher to $16.10 while Coles Myer edged seven cents lower to $9.89.
Shares in both Toll Holdings and Patrick Corporation strengthened as Toll pursues its $4.6 billion takeover of Patrick.
Toll piled on 27 cents to $12.65 while Patrick found seven cents to end at $6.77.
The price of gold dropped by 12.5 US cents to $US473.375 an ounce on the local market with gold stocks losing heat.
Shares in Newcrest Mining dropped 42 cents to $17.43 while Lihir shed three cents to $1.70.
The most traded stock was air conditioner provider AFT Corporation with 141.97 million shares traded, valued at a total of $4.98 million.
The stock was pushed half a cent lower to 3.1 cents.
National turnover was 1.26 billion shares traded worth a total of $4.03 billion with 421 stocks moving up, 533 down and 353 unchanged.
ANZ's senior currency strategist Craig Ferguson said the Australian dollar had gained as the US dollar weakened on rumours of GM's impending Chapter 11 bankruptcy.
GM said yesterday that it had been subpoenaed by the US Securities and Exchange Commission as part of an investigation into its accounting practices.
But it denied rumours of an impending bankruptcy.
At close of local markets the local currency was trading at 75.73 US cents, above the previous close of 75.59 US cents.
During the day's trade it reached a low of 75.25 US cents and a high of 75.86 US cents.
Mr Ferguson said otherwise it had been a quiet day for the local currency.
"The focus going into next week will be the (US) Federal Reserve and the likelihood of them raising rates which should support the US dollar and may cap any Aussie upside," he said.
The Australian dollar closed at 62.57 euro cents from 62.45 at yesterday's close and at 87.47 yen from 86.99.
The euro was at 1.2108 US dollars from 1.2106 and at 139.85 yen from 139.27.
The US dollar was at 115.47 yen from 115.11.
The Australian bond market closed slightly firmer, tracking US Treasuries which benefited from a flight to quality on the GM news.

Confidence back as inflation fears calm

Confidence back as inflation fears calm

The Australian sharemarket regained some of its confidence yesterday and had its biggest consecutive rise in two months as inflation fears eased.
After Tuesday's 33.6-point gain, the ASX 200 benchmark index jumped a further 52.6 points yesterday to 4443.4, while the All Ordinaries index gained 49.8 points to 4400.6.
The release of the consumer price index showed inflationary pressures were under control in the September quarter, with the annual rate of inflation rising from 2.5 per cent to 3 per cent.
"The market really took off after that data came out, despite what was a softer US market," said UBS head of equities sales trading, John Garrett.
"The main concern of the market has been inflation and the US reporting season.
"The US [results] have been okay and the inflation figures are good, so that was the catalyst for people putting money back into the market."
Every sector except telecoms was up but recent favourites, resources and financials, which took the heaviest battering in the downturn, were the greatest beneficiaries of the market's new-found confidence.

"With money coming back into the market people are focusing on stocks that have been sold off," Mr Garrett said.
Investment bank Babcock& Brown, which was stripped of value in the past four weeks, jumped $1.16 to $17.09, giving it an 8.3 per cent rise in two days. But this price was still well short of its September 30 record high of $21.85.
The fresh confidence in the market gave market-related stocks including the Australian Stock Exchange, the Sydney Futures Exchange and Challenger a healthy boost.
Gold stocks led the resources charge after an increase in the overnight spot price of the precious metal.
Lihir Gold was the biggest winner in the ASX 200, jumping 12c to $1.73.
Market analyst David Land from CMC Markets said investors may have over-reacted to the recent negative news about the closure of one of Lihir's mines, which might have led to an overzealous sell-off of the stock.
In a similar story, Newcrest recovered 57c to $17.85 but still remained short of its $20.25 price two weeks ago.
The other big resource stock movers were BHP Billiton, which gained 33c to $20.42 and Woodside Petroleum, which added $1.13 for a $32.03 close

Resources push up as investors dive in

Resources push up as investors dive in

Resources stocks drove the Australian sharemarket higher yesterday as investor confidence was boosted by a strong session in the United States.
Macquarie Equities associate director Martin Lakos said the market put on a reasonable performance in the wake of a strong lead from the US.
"The market is clearly taking heart from US President Bush's announcement of the new Federal Reserve chairman."
Ben Bernanke will replace Alan Greenspan as Federal Reserve chairman at the end of next January.
The ASX 200 was 33.6 points higher at 4390.8 while the All Ordinaries gained 33.5 points at 4350.8.
On the Sydney Futures Exchange, the December share price index contract was 33 points higher at 4399 on a volume of 22,390 contracts.
Investors dived back into resources, Mr Lakos said.
Rio Tinto climbed 55c to $54.82, BHP Billiton rose 32c to $20.09 while Woodside rocketed 92c to $30.90.
"ANZ had a very solid result, and a better-than-expected dividend, but it looks like this was factored into the share price because it was sold down," he said.

ANZ shares fell 43c to $23.19.
National Australia Bank was 14c richer at $32.29, the Commonwealth Bank added on 20c to $38.25 but Westpac shrank 19c to $20.22.
Telstra shares picked up 8c to $4.22 as the telco's boss Sol Trujillo told shareholders he could not give specific answers to their concerns about the stock price until a strategic review was finished in mid-November.
Optus owner Singapore Telecommunications picked up 0.5c to $1.875.
Media stocks were mixed with Fairfax rising 4c to $4.12, Publishing and Broadcasting falling 2c to $16.06 and News Corp adding on 16c to $20.49 while its non-voting shares climbed 21c to $19.53.
Retailer Coles Myer gained 21c to $9.79 and David Jones picked up 1c to $2.27 but Woolworths dropped 8c to $15.85.
Qantas was flat at $3.38 while its rival Virgin Blue climbed 3c to $1.50.
Multiplex shares rose 9c to $3.36 after it was awarded a $220 million contract to build a 56 level tower in Sydney's CBD.
Uranium explorer Uranex NL rode a wave of market interest in yellowcake stocks to end its first day's trading up 5c at 25c.
Elsewhere in the market, Zinifex surged 10c to $4.77 after delivering a bullish assessment of the strength of metals prices over the next two years.
JB Hi-Fi also rose, 10c to $3.27, after saying it expected trading to improve in the lead-up to Christmas.
And Futuris gained 5c to $1.92 after saying it was on target to repeat last year's double digit growth in underlying profit.
PaperlinX shares tumbled 11c to $2.85 after it pointed to gloomy industry conditions remaining at least until the New Year.
The spot price of gold in Sydney closed at $US465.625 up $US1.75 per fine ounce on Monday's close. Gold miners also rose, Newcrest lifting 27c to $17.28 and Newmont advancing 11c to $5.97.
The top traded stock was air purifying firm AFT Corp which gained 0.4c to 3.4c with 60.34 million shares traded.
National turnover was 1.05 billion stocks worth $4.42 billion.

Volatile market heads down

Volatile market heads down

After a volatile day, the stockmarket lost ground at the start of what is expected to be a hectic week.
The ASX 200 benchmark fell 7.1 points to 4357.2 while the All Ordinaries fell 7.9 points to 4317.3.
"It was a choppy day with a strong rally in the end, which was not bad in the grand scheme of things," said Andrew Coppin from Bell Potter Securities.
Mr Coppin said stocks across all sectors fell in the morning, after mixed overseas indicators, but later in the day the major banks helped the market recover so closing prices were not as dramatic as the intra-day figures.
National Australian Bank gained 5c to $32.15 despite announcing that net profit from the sale of its Irish banking operations was $30 million less than expected.
ANZ Bank, whose annual results will be released this morning, jumped 17c to $23.62, with the market expecting a record profit.
Westpac was the only one of the major banks to lose ground, dropping 9c to $20.41.

Macquarie Bank illustrated the market's volatility, rising $1.28 to $63.68 after hitting an intra-day low of $61.90.
In what was otherwise a low volume trading day, almost $100 million worth of Foodland stock traded, or close to 3 per cent of the company's value.
Traders speculated that the trade was made by an overseas hedge fund unwinding an arbitrage position.
The final figures for the proposed demerger and acquisition of Foodland by Woolworths and Metcash were due yesterday but did not materialise. Foodland's company secretary, Chris Bennett, said the results were "imminent".
Foodland's share price jumped 21c to $26.95.
Bell Potter's Mr Coppin said the market was likely to gain pace as the week progressed.
"There is a lot going on in terms of companies talking to the market this week," he said.
Twenty-six companies will hold their annual general meetings between this morning and the end of the week, including Telstra, Publishing & Broadcasting Ltd and Commonwealth Bank. Nine companies will issue results.
Mr Coppin said a lot of news was also expected from the US, including the AGMs of Exxon, Microsoft and Boeing, as well as the effects of the impending hurricanes.
The producer price index figures were released yesterday and recorded the largest quarterly rise in more than four years.
The market will be keenly awaiting tomorrow's consumer price index figures, which could determine what position the Reserve Bank will take on interest rates.

Shares end volatile week in the red

Shares end volatile week in the red

The sharemarket dropped back on Friday, ending an unpredictable week of taking its direction from commodity prices, Wall Street and US economic sentiment.
After plummeting on the opening of trade, the ASX 200 benchmark index regained ground, closing down 15.8 points to 4364.3, a loss of 41.8 over the week. The All Ordinaries closed at 4325.2, down 19.9 points on Friday or 46.1 points for the week.
"The volatility this week has been just outrageous," said Justin Gallagher from ABN Amro.
The market had extreme trends, either falling hard on opening and then rallying by the end of the day or skyrocketing in the morning and pulling back by the afternoon, Mr Gallagher said. "It makes it very difficult to work out what is going on."
There had been a huge volume of trading but no clear direction in the market, he said.
Eric Betts, of Nomura Australia, said the slight downward trend was driven by sentiment and profit taking. "The market is a moody beast and at the moment it is in a downbeat mood," he said.

"You've also seen some profit taking - we've had a strong run over the last 2½ years and a lot of the stocks have gone up a lot."
Mr Betts said the oil price was a key factor in the week's volatility, "in the sense that it will keep inflation on the boil".
Oil and gas producer Woodside Petroleum fell 95c on Friday and $2.02 for the week, to $29.88.
As an example of the market's volatility, National Australia Bank and ANZ recorded slight losses on Friday, while Westpac and the Commonwealth had small gains, but all four banks made overall gains in the week. ANZ was the biggest mover, closing at $23.45, down 11c on Friday and up 43c in the week.
The banks will be reporting over the next two weeks. "We think [the results] should be pretty good. In our opinion they could come out better than market expectations - towards the top end of the range," Mr Betts said.
Shane Oliver, head of investment and chief economist at AMP Capital Investors, said inflation would be the focus next week as the market awaited the consumer price index figures.
Dr Oliver expects the results are likely to be higher than Reserve Bank expectations.
"However, thanks to cheap products from China and elsewhere and a very competitive pricing environment, underlying inflation is likely to remain benign and this should allow the RBA to leave interest rates on hold."
Mr Betts said: "We wait to see [the] CPI with some … trepidation. That may be the smoking gun the RBA needs to move back to a tightening bias - where they may be signalling an inclination to raise rates in the future."

Resources weigh on market

Resources weigh on market

Australian shares went on a roller-coaster ride yesterday as the resources sector held down a buoyant lead from the big banks.
Macquarie Equities adviser Helen Spencer said the market had lost ground during the afternoon after a buoyant morning session.
The ASX 200 closed 2.9 points higher at 4380.1 while the All Ordinaries fell 0.8 to 4345.1.
"After a pretty solid start following on from a pretty positive lead from the US overnight, we lost a bit of confidence later in the afternoon," Ms Spencer said.
"With reporting and dividend season around the corner for the banks, they are the ones that have certainly fared the best today," she said.
ANZ closed 36c higher at $23.56, NAB rose 28c to $32.20 and the Commonwealth gained 22c to $37.70.
Westpac was 6c stronger, at $20.41 and St George added 4c to close at $26.50.
Macquarie Bank edged lower, ending 10c weaker at $63.41 after announcing its purchase of a UK ferry service.

The market was boosted from Wall Street overnight, where the S&P 500 index closed with its largest point gain in almost six months as profit reports from JPMorgan and others pointed to strong quarterly earnings.
The Dow Jones Industrial Average was up 128.87 points at 10,414.13 while the S&P 500 rose 17.62 to 1195.76.
Energy stocks took the biggest hit on the local bourse, as oil prices dropped on reports that Hurricane Wilma would not hit key oil producing and refining areas in the US.
Woodside experienced the largest hit, losing 88c to $30.83, Santos slipped 17c to $11.11 and Oil Search shed 1c to $3.26.
The major diversified miners were mixed, with BHP Billiton 4c weaker at $20.01 and Rio Tinto up 11c to $56.30.
Telstra gained 1c to $4.08, Origin Energy closed 9c stronger at $6.52 and bionic ear maker Cochlear slumped 63c to $36.50.
The media sector moved in both directions as News Corp pushed up 11c to $20.65, with its non-voting shares gaining 7c to $19.73, and Seven Network fell 12c to $8.10 .
PBL shed 1c to $16.25 while Fairfax was down 4c at $4.12.
A weakening gold price overnight weighed on goldminer Newcrest Mining, which closed down 75c to $17.25. Lihir Gold weakened 8.5c to $1.565.
The price of gold in Sydney was $US463.80, down $US5.10 on Wednesday's close.
The top traded stock was health care equipment and services company IMI Medical with 34.12 million shares traded for a total value of $761,890. The stock gained 0.1 of a cent to 2.2c

Market Corrections Oct 2005

The Australian stockmarket has shed about $40 billion since reaching its all-time high on Friday, September 30, with October again living up to its reputation as the most volatile month.
The 5 per cent fall is the sharpest since the terrorist attacks of September 11, 2001. The pullback was not, however, totally unexpected. Fund managers have been saying that the market had run ahead of fundamentals.
Both the Australian economy and corporate profitability remain in good shape, with the only risk being the high price of oil.
Last week the Reserve Bank's deputy governor, Glenn Stevens, warned that soaring petrol prices could re-ignite inflation.
The Australian stockmarket has been growing at an unsustainably high rate, putting on more than 50 per cent over the past two years.
It was always going to take just one trigger for some of the "hot" money to go out of the market. As it turned out, that trigger was fears in the US over the possibility of higher interest rates. Share investors get spooked by the prospect of higher interest rates, because it slows economic growth and reduces companies' profits.

Colin Cruickshank, a private client adviser with Baillieu Polkinghorne, says: "It is good to see a correction, because the All Ords has been been going up in a straight line and it was getting difficult to find value." Cruickshank says the correction "injects a note of caution for those who were getting carried away".
Brian Eley, the co-founder of the boutique fund manager Eley Griffiths Group, a specialist in Australian small companies funds, says that in the early phases of any sell-down there tends to be "indiscriminate" selling.
That is because investors are sitting on good gains and do not want to risk giving up those gains in a correction, if it were to become protracted.
While some commentators are saying that it will be a short and sharpish correction, some fund managers say the volatility could last for many weeks.
"I think it is a natural correction for a market that has moved ahead of its fundamentals," Brian Eley says.
"The market does not correct in a week; it takes a few weeks before figuring out what is really going on and investors feel confident enough to go back in."
Stockbroker Marcus Padley, the author of the Marcus Today newsletter, says in the absence of profit warnings or concerns over the economy, the correction will most probably be short-lived. He says the correction has everything to do with the "herd" mentality of investors and nothing, at this point, with fundamentals.

Bob Van Munster, the head of Australian equities at Tyndall Investment Management, says the performance of a market index can be a bit misleading.
He says the strong run of the Australian stockmarket, particularly over the past 12 to 18 months, has been led by the resources and energy sectors, and that few other stocks have participated.
"It is really only a handful of stocks that have been [boosting] the indices over the past year ... and the correction has really only been in these high-flying sectors," Van Munster says.
The major casualties have been those that enjoyed the biggest increases since the beginning of this year.
They include the big resources stocks, on the the back of high commodity prices, and others such as Babcock & Brown and Macquarie Bank.
Babcock & Brown, Woodside Petroleum, Macquarie Infrastructure Group, Macquarie Bank, BHP Billiton and Iluka Resources are each down more than 5 per cent from their September 30 prices.
But shareholders in these stocks continue to sit on big capital gains and the latest correction may prove to be only a hiccup.
Babcock & Brown's share price has almost doubled since the beginning of this year to September 30. Woodside had increased by almost 80 per cent and Macquarie Bank by more than 60 per cent. BHP Billiton and Iluka Resources each increased by about 40 per cent.
The boutique fund manager Investors Mutual is holding relatively high levels of cash in its Australian shares funds. "We realise our investors want us fully invested, but they do not want us fully invested into an overvalued market," says Andrew King, a portfolio manager at Investors Mutual.
"The market is correcting, but we do not think that the optimism is out of the market yet," he says.
Tyndall's investment mandate is to stay fully invested in the market, and Van Munster and his team are continuing to invest in companies with relatively defensive earnings.
The big "mum and dad" stocks have been mostly spared during the latest sell down. Telstra's share price has been on the slide for months. Among the stocks widely held by small investors, Insurance Australia Group and Woolworths have each lost more than 5 per cent.
Commonwealth Securities' chief equities economist, Craig James, says the economic fundamentals have not changed.
And he says small investors who invest on fundamentals do not have to do anything, as it is unlikely they will be hurt by the correction.
James says that October is the most volatile month of the year for the sharemarket.
Two of the biggest crashes since the end of World War II occurred in October 1987 and October 1997.
James says that on average over the past 20 years, the All Ordinaries has swung in the range of 10 per cent during October, compared with a normal monthly range of about 5 per cent.
The effect is one of volatility in share prices, and does not necessarily mean lower prices, and the effect occurs on all major sharemarkets.
The reason for the October effect is unknown. Perhaps it is just the psychology of investors knowing that most of the biggest sharemarket crashes, including the 1929 Wall Street crash, occurred in October.
James says it may be that October is when traders and investors in the northern hemisphere return to work after the summer holidays and reposition their share portfolios.
Eley Griffiths' Brian Eley is not yet buying shares for his fund and is happy to allow cash build up in his fund. He expects it could be a few weeks yet until the picture on the Australian market becomes clearer.
In the last correction, in March this year, the Australian market slid almost 10 per cent over two months, before going on to record record highs.
Eley says with the annual general meeting season upon us, the market will get a much better picture of how companies are travelling. Companies with June 30 financial years will report their results - the majority of all listed companies.

Stocks take dive on US fears

Stocks take dive on US fears

The market takes a fall on Wall Street to heart, dropping three times as much in percentage terms.
AUSTRALIAN shares have closed sharply lower, with the market undergoing a further correction after a negative lead from Wall Street.
Resources, banking and media stocks were all in the red, as selling swept across the market on the 18th anniversary of the 1987 stockmarket crash.
The S&P/ASX 200 Index finished at its low for the day of 4377.2, a loss of 82.1 points or 1.8 per cent. On the Sydney Futures Exchange, the December contract on the Share Price Index dropped 91 points to 4368.
Bell Potter senior adviser Stuart Smith said the market was experiencing a well-overdue correction.
"There could well be distress selling until there's a level of value reached, and that may be about 4250 on the S&P/ASX 200," he said.
Overnight on Wall Street, US markets closed lower after a report showing a big jump in wholesale prices reignited inflation fears. The Dow Jones Industrial Average finished down 62.84 points, or 0.6 per cent, at 10,285.26.
Australian market leader BHP Billiton dropped 70¢ to $20.05.

Rio Tinto shrank $1.71 to $56.19 despite the resources giant announcing in its third-quarter production report that it had sustained high levels of production during the period, with most operations producing at or near capacity.
Gold miner Newcrest tumbled $2.18, or 10 per cent, to $18 after warning that it would not meet profit expectations in the first half of 2006 because of problems at the Telfer gold and copper mine in Western Australia.
Among the other gold miners, Newmont fell 23¢ to $5.89 and Lihir dropped 11¢ to $1.65. The spot bullion price fell a further $US5.03 an ounce to $US468.90 in Sydney trading.
Oil producer Woodside said increased production and higher commodity prices had underpinned a 27.6 per cent rise in revenue for the first nine months of 2004. Its shares dropped 69¢ to $31.71.
Elsewhere, Woolworths put on 13¢ to $15.79 after the supermarket giant reported a 14.4 per cent increase in first-quarter sales to $8.88 billion, despite the impact of rising petrol prices.
Coles Myer lost 6¢ to $9.68.
Air New Zealand shares descended 3.5¢ to 99¢ after the airline warned that soaring fuel prices and an oversupply of capacity would cut its 2006 pre-tax profit by more than 50 per cent to $NZ100 million ($A92.7 million).
Qantas was down 7¢ to $3.33 and Virgin Blue gained 4¢ to $1.59.
Telstra gave up 6¢ to $4.07 while Optus owner Singapore Telecommunications fell 2.5¢ to $1.89.
Lion Nathan shares closed 3¢ lower at $7.97 before a court ruling put its $352 million hostile takeover bid for Coopers Brewery in doubt.

Finance, resources tumble again

Finance, resources tumble again

Resources and financial stocks took a hammering yesterday as the market had its third largest single-day fall of the year.
After a weak overnight lead from US markets and falling gold and oil prices, the ASX 200 benchmark lost 82.1 points to close at 4377.2 and the All Ordinaries index fell 76.6 points to 4345.9.
Resources stocks were dealt a triple blow, with bad company reports on the back of sliding commodities prices and shaky market confidence.
The quarterly results of gold explorer Newcrest Mining set the negative tone for the day after it warned that problems at its Telfer mine would affect production and profitability.
The company stripped 10.8 per cent - close to $700 million - off its value after its share price dropped $2.18 to $18.
The company's woes were magnified by the rising fuel price.
Jamie Spiteri from Shaw Stockbroking said mining companies, which were poised to increase production, were only just realising the massive impact that fuel costs would have on bottom line figures.

The bad news from Newcrest sucked down some of the smaller gold stocks, including Lihir Gold which fell 11c, or 6 per cent, to $1.65.
"Sector performance among gold was poor - they suffered in sympathy with Newcrest coming back as far as it did," said Mr Spiteri.
A suite of mining houses issued quarterly results yesterday, including Rio Tinto. The big miner reported increases across all divisions, with iron ore and copper being the standouts, but the share price still fell $1.71 to $56.19.
"Rio Tinto was feeling the effect of weaker sentiment and volatility in the market," Mr Spiteri said.
BHP Billiton maintained the trend, falling 70c to $20.05.
Don Hamson, head of active Australian equities at State Street Global Advisors, said resources stocks were particularly sensitive to market sentiment.
"They are highly geared to the good times and highly geared to the bad times when people roll down their expectations for commodity prices," Dr Hamson said.
Financial stocks weighed the market down as strongly as the resources, though it was a thin news day in the sector.
"Financials do have heavy influence over our market … [yesterday] they just participated in the trend in a market which is weakening and showing vulnerability. There is no reason for sectors to perform contrary to that trend."
Perpetual Trustees lost $3 to $61.20 and Macquarie Bank fell $2.41 to $63.51.
"The high-priced growth institutions amongst the financials do feel the effect of significant weak trends in the market," Mr Spiteri said.
The major banks were all down, dropping between 1 and 1.5 per cent, though they out-performed the market.
"The banks are the biggest, most liquid, in the market so if you're going to sell you'll sell the banks first," Dr Hamson said.
Woolworths stood out among a very small group of positive performers, rising 13c to $15.79, after reporting a positive first-quarter sales growth report and getting approval from the Australian Competition and Consumer Commission to acquire 19 Action supermarkets.

Yesterday was the 18th anniversary of the 1987 Wall Street crash.

Miners fight back, push shares higher

Miners fight back, push shares higher

The sharemarket closed stronger yesterday thanks to a solid performance from the big resource houses and a positive guide from Wall Street.
ABN Amro Morgan client adviser Margaret Morrissey said higher copper prices overnight sparked the bounce in miners like Rio Tinto and BHP Billiton.
The ASX 200 closed 34 points higher at 4459.3 while the All Ordinaries grew 32.6 to 4422.5.
At end of day trading on the Sydney Futures Exchange, the December share price index lifted 33 points to 4459 on a volume of 16,505 contracts.
BHP Billiton jumped 70c to $20.75, Rio Tinto gained $1.95 to $57.90 and oil and gas producer Woodside improved 80c to $32.40.
The banking sector was mixed with ANZ firming 3c to $23.50, National Australia Bank put on 13c to $32.36 and the Commonwealth rose 33c to $38.08.
Westpac bucked the trend, losing 15c to $20.56.
Macquarie Bank more than made up for yesterday's losses, advancing $3.17, or 5 per cent, to $65.92.

"Macquarie got a bit of a fright yesterday with a rumour going around they might be looking at a British beverage group," Ms Morrissey said.
"People thought they might be overstretching themselves but the worry has disappeared today because Macquarie have gone gangbusters."
Shares in Patrick gained 10c to $6.62 after it said the hostile bid from Pacific National partner Toll Holdings was inadequate.
Toll shares also went higher, rising 27c to $12.40.
"It looks like Toll will have to come back with a higher bid," said Ms Morrissey.
In retail, punters have piled into Woolworths, pushing it 26c higher to $15.66 on the prospect of a strong first quarter sales result due tomorrow.
"We've forecast first quarter sales could be as high as 12.3 per cent," Ms Morrissey said.
Coles Myer was left unchanged at $9.74 while David Jones rose 4c to $2.30.
News Corp firmed 10c to $20.92 and its non-voting scrip grew 15c to $19.94.
After the market closed, Australian subsidiary News Ltd said it was increasing its cash offer for website realestate.com.au from $2 to $2.50 per share, stressing it was the final offer.
Publishing & Broadcasting Ltd reversed 25c to $16.31 while Fairfax was 9c stronger at $4.28.
Telstra lost 5c to $4.13 and Optus parent Singapore Telecommunications eased 1.5c to $1.915.
The price of gold in Sydney was $US473.925 per ounce which was $US2.125 above Monday's close.
Gold miner Newmont lifted 15c to $6.12 and Newcrest dropped 6c to $20.18. Lihir weakened half a cent to $1.76.

Stocks surge, but turbulence looms

Stocks surge, but turbulence looms

The Australian sharemarket closed stronger yesterday after a healthy lead from overseas, but brokers warned the gains could be short-lived.
Fat Prophets director Angus Geddes said the market had rallied, with the big banks experiencing a standout day. "We have had a turbulent couple of weeks and I think we are seeing buyers coming back into the market and obviously people see the banks as a bit of a safe haven," he said.
But Mr Geddes said more turbulent days were to come as stocks returned to fairer prices after a long bull run. "I don't think we have seen the end of the correction," he said.
The ASX200 ended the day up 19.2 points to 4425.3 while the All Ordinaries rose 18.6 points to 4389.9. At the end of day trading on the Sydney Futures Exchange, the December share price index contract climbed 20 points to 4426 on volume of 18,292.
Market darling Macquarie Bank was out of favour, dropping $2.95 or 4.49 per cent to $62.75 in the wake of reports it had launched a takeover bid for British pub operator Spirit Group.

The big four banks all posted healthy gains with ANZ rising 45c to $23.47, Westpac climbing 39c to $20.71, National Australia up 31c to $32.23 and Commonwealth Bank rising 25c to $37.75.
The big miners were also in positive territory with Rio Tinto climbing 74c to $55.95, BHP Billiton up 7c to $20.05 and Alumina lifting 8c to $5.74.
Property and construction group Lend Lease rose 23c to $13.92 after it forecast continued profit growth.
Rupert Murdoch's News Corp rose 15c to $20.82 and its non-voting stock was up 7c to $19.79, while Kerry Packer's PBL rose 32c to $16.56.
Telstra climbed 6c to $4.18 and Optus-owner Singapore Telecommunications was unchanged on $1.93.
Coles Myer went ex-dividend by 17c yesterday and dropped 8c to $9.74 while rival Woolworths fell 6c to $15.40 and David Jones rose 4c to $2.26.
Western Australian ship builder Austal climbed 19c to $2.34 after winning a share in a $US223 million ($296 million) contract to build the first of two vessels for the US Navy.
Wall Street rallied on Friday as a report on consumer prices eased inflation fears. The Dow Jones industrial average closed up 70.75 points at 10,287.34 and the Standard & Poor's 500 Index rose 9.73 points to 1186.57.
The price of gold in Sydney was $US471.80 per fine ounce, up US67.5c from Friday's close.
Among the gold stocks, Newcrest eased 1c to $20.24, Newmont fell 5c to $5.97 and Lihir Gold dipped 2.5c to $1.765.
The top traded stock by volume was IM Medical with 75.53 million shares worth $1.85 million changing hands. The share price rose 0.2c to 2.4c.
Market turnover was 1.05 billion shares worth $2.90 billion, with 529 stocks up, 453 down and 331 unchanged.

10 rules to success

10 rules to success

1. Find your will.
You need that passion to drive you to make it happen against seemingly impossible odds.
Look deep within yourself to discover that thing you really love to do.

2. Pick a flava.
Find a style that expresses your personality, from the way you tie your shoelaces to the way you handle your business. Do it with polish. There's no excuse for being grimy and bad-mannered.

3. Walk this way.
Getting educated is the way to make it happen. Whether you study at college or the school of life, knowledge and experience will give you the tools you need for success.

4. Create a blueprint.
Make planning part of the way you live. Prepare, research and focus on the task in front of you. Be alert and present at all times.

5. Play your position.
Don't act like you're too good for it. Have the humility and respect to do your job to the best of your ability, whether it's digging ditches or answering the phone. That's how all great leaders get started.

6. Embrace the struggle.
Learning to love the hard times can make you stronger, wiser and more willing to take risks.

7. Get connected.
Keep an open mind and be compassionate. When you wear your heart on your sleeve, people bring you repeat business.

8. Step outside your box: m.i.x.
Go beyond acceptance and reach out to people who are different from you.

9. Don't let cash rule.
Don't hoard, but don't spend money on diamonds and platinum as if it's your last day on Earth either. Live well, but set aside some horizontal money. Property, bonds and stocks will generate wealth even while you're lying on your back!

10. Flex purpose, not power.
Don't ask someone to do something you wouldn't do yourself. Explain the mission and communicate to inspire and empower others.

Market follows US into lower territory

Market follows US into lower territory

The Australian stockmarket closed sharply lower yesterday despite lifting in the afternoon, after US markets fell overnight to their lowest finish in five months.
"The [Australian] market was pretty volatile. We obviously had a negative lead from America," said ABN Amro Morgan's private client adviser, Simon Ferguson.
The ASX rallied in the afternoon as investors looked for bargains but the market was going through a correction and was probably still to find the bottom, he said.
"What we've seen is that any rally has struggled to gain traction for more than a day. We're really in the hands of the US market at the moment."
The ASX 200 fell 37.2 points to 4431.0 and the All Ordinaries 34.5 to 4394.9.
On the Sydney Futures Exchange, the December share price index contract fell 12 points to 4462.
On Wall Street overnight, the Dow Jones Industrial Average index fell 36.26 points to 10,216.91 as fears of rising interest rates affected investor sentiment.

On the local market, in the resources sector, BHP Billiton fell 36c to $20.47 as it said oil and gas production for this year would be up to 10 million barrels lower, largely due to damage to production facilities in the Gulf of Mexico from Hurricane Rita. Rio Tinto fell 79c to $56.69 and oil and gas producer Woodside Petroleum 20c to $32.38.
Among the major banks, National Australia Bank fell 19c to $31.96, Commonwealth Bank 5c to $37.40, ANZ 18c to $23.16, and Westpac 9c to $20.59.
Bank of Queensland rose 30c to $12.70 after reporting a 42 per cent rise in 2004-05 net profit but warning its branch rollout was unlikely to meet targets.
In media, News Corp lost 25c to $20.35 and its non-voting shares fell 17c to $19.51.
Among retailers, Coles Myer fell 23c to $9.82 and Woolworths 35c to $15.40. Harvey Norman was steady at $2.74 as it said first-quarter sales were up 8.1 per cent to $1.06 billion.
Telstra slipped 4c to $4.10.
Among gold stocks, Newcrest rose 15c to $19.57 and Lihir fell 3.5c to $1.74.
The price of gold in Sydney was $US473.875 per fine ounce, down $US4.225 on the previous day.
Among other companies, soft-drink maker Coca-Cola Amatil fell 32c to $7.64. It expects low double-digit earnings growth in the second half and warned of continuing pressure from rising commodity and petrol prices.
Qantas slipped 2c to $3.36 as it said the cost of fuel was the key factor for the coming year.
Support services provider Brambles was placed in a trading halt and last traded at $8.63.
After the market closed it announced it would sell the German arm of its waste management business Cleanaway for $893 million and buy information manager Ausdoc for $260 million.
The top traded stock by volume was life sciences firm IM Medical, with 48.94 million shares worth $911,103 changing hands. IM Medical rose 0.3c to 1.8c.
National turnover was 1.31 billion shares worth $3.85 billion, with 609 stocks down, 377 up and 322 unchanged.

Resource sector leads market rebound

Resource sector leads market rebound

The sharemarket closed stronger yesterday, with the resources sectors leading a rebound from last week's losses.
The US markets provided a sound lead from Friday with the Dow Jones and S&P 500 indices both closing stronger.
The domestic market built on its steady opening to finish the day in positive territory, the ASX 200 index up 28.5 points at 4469.1 points and the All Ordinaries up 27.8 at 4427.9.
On the Sydney Futures Exchange the December share price index contract closed the day trading 35 points higher at 4484 on a volume of 14,381.
Shaw Stockbroking head dealer James Spiteri said while there was not much news around, the market had performed better after the volatility of last week.
"I think we are seeing some renewed buying coming to our markets, believing they can take advantage of lower prices after the sell-off last week," Mr Spiteri said.
"To some degree there has been a rebound in some areas that had been hit pretty hard."

The resources sector in particular staged a recovery with the nation's biggest miners closing with gains in hand.
Rio Tinto pushed 75c higher to $57.25 while BHP Billiton moved 25c higher to $20.72.
Energy stocks also made gains with Woodside Petroleum surging 90c to $32.84 and Santos jumping 22c to $12.00.
Babcock & Brown was also a winner after it announced its investment vehicle, Babcock & Brown Capital, would buy a 10.8 per cent share in Irish telecom Eircome Group for $350 million.
Shares in B&B soared $1.09 to $18.29 and Mr Spiteri said it was one of the stand-outs of the day.
"It just reinforces that despite all the uncertainty related to last week's weakness in equity markets, for the deal makers like Babcock & Brown and Macquarie Bank it is business as normal and they are in the business of deal making throughout the world."
Macquarie Bank also enjoyed a day out with its shares pushing $1.11 higher to $70.01.
The major banks were mixed, with ANZ closing up 18c to $23.18 and Westpac 7c stronger at $20.52. The Commonwealth and NAB moved the other way, ending down 23c at $37.41 and down 5c at $32.20 respectively.
Property stocks were stronger with Westfield piling on 21c to $16.45 and Lend Lease strengthening 28c to $13.71.
Healthcare firm Mayne Group shed 2c to $5.43 after it said the future of its demerged pharmaceutical arm would be determined by new products, acquisitions and a better supply chain.
Retailers went well with Woolworths 17c up to $15.92 and David Jones climbing 5c to $2.44 after announcing a distribution agreement with French lingerie brand, Simone Perele.
News Corp slipped 19c to $20.71 with non-voting shares following, 13c lower at $19.70.
Amongst other media stocks Ten put on 2c to $3.52 while Fairfax slumped 3c to $4.41.

It's been another unlucky October for investors.

It's been another unlucky October for investors.

The October curse has returned to haunt the Australian sharemarket.
After reaching a record high a week ago, about $41 billion was slashed from the market's value on Wednesday and Thursday, the two worst trading sessions since the dark days following the terrorist attacks on September 11, 2001.
Stocks that had powered the market to a record - energy, resources and banking shares - were among the hardest hit.
There is an eerie precedent for sharemarket bloodshed in October. The two greatest stockmarket disasters of the past century have happened at this time of year.
The most famous and damaging of all, the Great Crash of 1929, struck Wall Street on October 24. The fallout from this event plunged the industrialised world into depression for years, causing social isolation, dislocation and, indirectly, a world war that cost millions of lives.
The sharemarket crash of 1987 started in New York on Black Monday, October 19, and arrived in Australia the following morning. The All Ordinaries barrelled into October that year at 2234 points, only to end the month at 1285 points - a fall of nearly 60 per cent.

There have been some rough Octobers for shareholders since then, such as October 1997, when the Asian financial crisis shook global markets and stripped more than 300 points from local shares.
In the past 20 years, Australian stocks have posted an average gain of 0.8 per cent per month, but the October average is minus 0.9 per cent, research by AMP's chief economist, Shane Oliver, shows.
"October is the weakest month of the year for the Australian sharemarket," Oliver says. "There is just something about October."
The months that bracket October - September and November - have also been much weaker than other months. In contrast, the months of January, April and December have delivered the biggest average gains.
US tax rules may be one factor behind the October jinx.
US investors tend to sell their losing stocks to realise tax losses and offset these against any capital gains towards the end of the US tax year, which for most US mutual funds ends in October. This may have a depressing effect on sharemarkets across the world at this time of year. September tends to be the weakest month for shares on Wall Street.
Even if the October jinx is put aside, the events of the week came as no surprise to many market watchers.
The All Ordinaries Accumulation Index, which measures total returns on Australian shares, rose by almost 30 per cent during the year to September 30, the biggest annual gain for 12 years.
And in the September quarter itself, the All Ordinaries and the S&P/ASX 200 rose by more than 8 per cent, with mining shares up nearly 20 per cent in that period.
Last weekend, funds managers and brokers were stunned at just how strong the local stockmarket had been, particularly in the final few days of the quarter, when it just powered ahead.
The Australian bourse's spectacular performance over the past year - it has traded at a premium to international stockmarkets such as Wall Street and London - was fuelled by an insatiable demand for raw materials from China and India.
BHP Billiton, now the world's biggest miner, blitzed the earnings stakes this year with an $8.6 billion profit, the biggest in Australian corporate history, well ahead of its $4.9 billion record last year.
The huge gains of the past few months meant the sharemarket was ripe for some old-fashioned profit taking - and the excuse for investors to do this came from Wall Street, which dropped 1 per cent on Tuesday night.
Comments by Federal Reserve officials expressing concerns about US inflation triggered the sell-off.
The officials' surprisingly candid language on inflation raised concerns that US interest rates might rise further than expected and take a toll on global growth.
For example, one of the world's biggest financial institutions, Citigroup, lifted its US interest rate forecast on Wednesday from a peak of 4 per cent by year's end to 4.5 per cent by early next year. Citigroup warned there were "emerging risks" that official rates in the US could reach 5 per cent.
Economic figures released during the week also pointed to slower growth and rising inflation in the US.
The combination of rising inflation and slowing growth - dubbed "stagflation" in the 1970s - is a bad combination for sharemarkets.
It cast doubt on the global economic outlook, and that has implications for Australian firms.
Should global growth slow, demand for Australian exports - especially minerals - could fall. As a result, miners such as BHP Billiton suffered disproportionately during this week's correction.
There are other uncertainties troubling investors, especially in the US.
One of these is the lingering uncertainty over who will succeed the Fed's chairman, Alan Greenspan, when his term finishes at the end of January.
The new chairman will assume the post at a time when setting monetary policy has been made more challenging by the spike in the price of oil.
This can lift inflation and crimp activity at the same time - a difficult combination of economic forces for a central bank.
Greenspan's replacement may be required to make difficult judgements about monetary policy next year.
Lifting rates too far could choke US - and therefore global - growth unnecessarily, while leaving rates too low might allow inflation to become a problem.
"If you go back through history, most new Fed chairmen have a baptism of fire within six months of taking office," says Macquarie Bank's chief economist, Richard Gibbs. "So there is a real level of uncertainty there."
The hurricanes that devastated parts of the Gulf of Mexico coast last month might also distort important economic indicators on the US economy for months.
This could shroud the true performance of the US economy, creating more uncertainty for policy makers and investors.
Even so, the forces that pushed the Australian sharemarket to a record high just a few days ago are still in place.
But while share prices may have surged in the past 2½ years, this boom has good earnings results to back it up, unlike others.
The last big sharemarket boom in 1987 was underwritten not by strong sales but by a lending binge from a newly deregulated Australian banking sector.
Foreign banks fell over one another to dish out as much cash as they could to a brash young breed of entrepreneurs, including Christopher Skase and Alan Bond.
They more they borrowed, the more they bought. And the more they bought, the faster asset prices rose. When the lending bubble burst, so too did the share prices.
This time around, the boom is built on solid earnings. For now, the world economy is robust and the demand from China and India that is bolstering the Australian economy has not changed. The price of oil has also started to ease, soothing concerns about inflation.
Since peaking in late August at more than $US70 a barrel, the price has fallen back below $US62 a barrel, comforting global financial markets.
"Our assessment is that the fall in global sharemarkets over the last week is a correction rather than the start of a new bear market," Shane Oliver says.
But even if the events of the week prove to be a temporary correction, it will make investors a little more wary when October rolls around again.

Up, down - market renews the drama

Following a dramatic two-day dive, the Australian sharemarket suffered a rollercoaster ride on Friday - again driven by psychology and sentiment.
After a series of gains and losses during the day, the ASX 200 benchmark closed down 6.7 points to 4440.6. Over the week, the index lost 201 points, or 4.3 per cent, - its sharpest fall since September 2001.
The All Ordinaries remained virtually flat on Friday, dropping 1.9 points to 4399.9, a fall of 192.7 points or 4.2 per cent over the week.
"It has been quite a quiet week in terms of news," said Eric Betts from Nomura Australia. The fall in the market over the week was a reality check after weeks of rapid gains.
It was talk of inflation by some within the US Federal Reserve that helped put the brakes on the surging market. Mr Betts said the falls were "just reminding people there was more than one way for the market to go".
The stocks that made the greatest gains over the past few months had the hardest falls this week.

BHP Billiton, which rose 20.3 per cent over the last quarter, dropped 8 per cent over the week. The stock closed at $20.47, a 29c loss in the day and a fall of $1.78 over the week.
Babcock & Brown reversed its run. The investment bank increased its value by more than 50 per cent last quarter, but lost 19 per cent during the week. The stock closed at $17.20, up 69c from Thursday but was down $4.00 over the week.
Marcus Padley from Tolhurst Noall said: "This calendar year the top-seven stocks have accounted for 69.7 per cent of the performance, and the top-20 stocks 97 per cent. . . . in the fall from last Friday the worst seven accounted for 40 per cent of the fall and the top 20 for 62 per cent of the fall."
Mr Padley said the previous market correction, in March this year, led the bourse to pull back 9.3 per cent over two months before it bounced back and rose 18 per cent in the next four months.
"We are not going to recover all this in a blink. It takes three times as long to recover confidence as it does to lose it. It will be a long haul to get to this level again."
However, Mr Betts said the falls this week should present good buying opportunities. Recent news reports said fund managers were complaining they couldn't find value in the market.
"They may find value now," he said. "Panic sellers may give an opportunity for people to step in. The earnings are very good."
The annual general meeting season is about to begin. "My suspicion is that the AGM season will actually prove reasonably good for most companies. There is no need to panic."
Mr Betts maintained his original forecast that the market would close on 4600 by the end of the year.