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Australia

PACIFIC WATCH

October 30, 1995| Times Staff and Wire Reports

Investors Show Pessimism: Concerns about high inflation and slowing corporate profit growth outweighed expectations that demand for metals is picking up, causing Australian stocks to plummet last week. Government reports on wages and consumer prices pointed to inflation higher than the central bank's ceiling target, ending expectations of any cut in official rates. That sent bonds plummeting and interest rates rising. As of Friday, the benchmark All Ordinaries index had slid almost 2% to 2067.4. Ron Porter, a director at J.B. Were & Co., said Australian investors will be watching events offshore this week, particularly in the United States. Brokers said the possibility of a pre-Christmas national election is keeping some foreign investors at bay. The imbroglio between the government and the business world, set off by Prime Minister Paul Keating's calling fund managers "donkeys," has not helped foreign perceptions about Australia, participants said.

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