Market falls, outperforms other Asian markets

The New Zealand sharemarket fell but outperformed other markets in Asia and proved again that it can be the source of new capital for listings.

The benchmark NZSX-50 index closed down 27.547 points, or 0.877 per cent, at 3113.629. Turnover was worth $70.72 million. There were 22 rises and 58 falls among the 116 stocks traded.

Across Asia markets were down for the fourth straight session in the longest losing streak since July, IG Markets said.

With Fletcher Building down 18c to 767 and Contact Energy down 14c to 591 the local index was under pressure.

The big news of the day was the long-awaited details of a total $249m capital raising by PGG Wrightson, comprising a $180.7m fully underwritten rights issue at 45c a share. The existing shares were on trading halt to 4.25pm and closed down 1c at 64.

"It is pretty successful on the company's part to get away a fully underwritten issue of that size," said Grant Williamson, director at Hamilton, Hindin, Greene.

Trading conditions were still extremely difficult for the company but it was being recapitalised into a more healthy position.

"The market is going through a capital raising phase at the moment and that does put some pressure on share prices for the existing companies listed," he said.

The top 50 was pretty much a sea of red today with only eight stocks registering gains.

Cavalier fell 21c to 230, Infratil fell 1c to 150, and Methven fell 1c to 149.

SkyCity fell 3c to 337, Mainfreight fell 9c to 555 and Sanford fell 10c to 475. NZ Refining Co fell 4c to 502, Nuplex fell 4c to 246 and Tower fell 1c to 175. The Warehouse fell 9c to 408.

Kathmandu ended its first full week on the market at 217, compared to the issue price of 213.

Telstra rose 5c to 416, Ryman rose 1c to 196, Ebos rose 3c to 593, Port of Tauranga rose 8c to 700 and Rakon 2c to 118. AMP Office rose 1c to 78 and APN News rose 5c to 298.

US stocks slid as another batch of economic data pointed to the fragility of the recovery and a brokerage's dim view on the semiconductor sector hit technology shares.

The benchmark S&P 500 suffered its worst one-day percentage fall in three weeks as investors feared that weakness in housing and labour markets would persist, making current stock valuation seem unjustified.

"There's this feeling that the economy has lost momentum from the third quarter," said Bruce Zaro, chief technical strategist at Delta Global Advisors in Boston.

Bank of America-Merrill Lynch cut its 2010 growth outlook for the semiconductor industry on concerns about a an inventory glut. It downgraded 10 stocks.

The Dow Jones industrial average shed 93.87 points, or 0.90 per cent, to end at 10,332.44. The Standard & Poor's 500 Index slid 14.90 points, or 1.34 per cent, to 1094.90. The Nasdaq Composite Index dropped 36.32 points, or 1.66 per cent, to 2156.82.

- NZPA