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Markets merry as they go round again -

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Markets merry as they go round again

The World Today - Friday, 14 November , 2008 12:18:00

ELEANOR HALL: The Australian share market rebounded strongly today as a rally on Wall Street
offered some rare optimism to local investors.

But today's lift comes after yesterday's 5.5 percentage point plunge which took Australian shares
to their lowest level in four years.

To discuss the latest market moves, I'm joined now in the studio by business editor Peter Ryan.

So Peter, is today's rise just a blip, another sign of volatility?

PETER RYAN: It has been said recently that you wouldn't want to be setting your biorhythms on the
share market at the moment. You might end up in some type of psychological trouble but we've seen a
lot of evidence from Wall Street earlier this morning.

It was looking quite dire when I came in about 6 o'clock. Particularly on the outlook for jobs
which appear to be getting worse and also some pretty grim news for technology companies but quite
amazingly in the final hour of trade investors decided to snap up bargains. Particularly with the
lower price of crude oil and we also have energy shares at their cheapest on record and there were
major gains for the big oil companies Exxon and Chevron.

So despite the gloom that we are accustomed to, the Dow ended up closing 6.7 per cent higher. Quite
extraordinary and almost all of that was in the final 30 minute of trade.

That was reflected here not surprisingly. A short time ago the All-Ordinaries index was up 2.2 per
cent or 83 points at 3,754 and that is grabbing back some of yesterday's $60-billion worth of
losses which took the share market to a four year low.

ELEANOR HALL: And the markets are expecting some more critical economic data from the United States
- is that a factor?

PETER RYAN: Yes, and that is always a factor. Overnight in the United States they were expecting a
very significant retail sales figures which some analysts are expecting to be the worst ever on
record in the United States and of course we know that the US consumer is dramatically trimming
back their household budgets.

Anecdotal evidence of a lot of people in shopping malls in the United States but not so many people
are spending money and particularly that was underlined by pictures I saw on television last night
of empty stores in the United States, empty aisles and that means when the US consumer stops
spending, the rest of the world follows suit.

ELEANOR HALL: And there's some worrying local data on the rural economy. What can you tell us about
that?

PETER RYAN: Yes, this is information hot off the press from the Australian Bureau of Statistics and
in many ways it is not surprising because we have had continuing unfavourable conditions and also
the water crisis in rural Australia keeping agricultural production down but we are seeing rice
plantings for example, dropping to their lowest level since 1927.

ELEANOR HALL: 1927?

PETER RYAN: You have to go back to 1927 to see rice plantings at their lowest level but more
interestingly we are also seeing sheep and lamb numbers at 79-million head.

This is also at the lowest since the 1920s but on the other hand we are seeing plantings for
sorghum coming in a record high of 100-million hectares or four-million tonnes but significantly
just on livestock, milk cattle numbers decreased by six per cent and pig numbers for example down
16 per cent so to use that old Australian phrase, they were riding on the sheep's back is not
necessarily true at the moment and despite some good news we have been seeing on the weather front
on some isolated parts of Australia, life remains very tough on the land.

ELEANOR HALL: Peter Ryan, our business editor. Thank you.