NZ market lower in quiet trading

The New Zealand sharemarket drifted lower today after receiving fairly mixed signals from offshore.

The main US indices trimmed early gains but closed up as enthusiasm from a solid bout of economic data was dampened by a Federal Reserve official's warning about banks' loan losses.

Brokers said it was a fairly quiet local session with some investors out of the market in the afternoon ahead of the Melbourne Cup horse race. Some also took to the sidelines ahead of the Australian interest rate decision at 4.30pm.

The benchmark NZSX-50 index closed down 24.745 points, or 0.777 per cent, at 3158.994, having opened slightly firmer. Turnover was worth $78 million. There were 25 rises and 51 falls among the 109 stocks traded.

James Snell at First NZ Capital said it was a quiet session.

"The tone is still fairly weak and it is led by some people taking off the risk trades globally at the moment," he said.

"The volatility continues albeit on very light turnover."

Shares in NZ Refining Co were down 9c to 511 after it was revealed a consortium of the NZ Superannuation Fund and Infratil was negotiating with Shell over possibly buying Shell New Zealand's refining, and distribution and retailing businesses. That includes a 17.1 per cent stake in NZ Refining.

Infratil shares were down 6c early to 159.

"It is a case of wait and see for further details," Mr Snell said.

Fisher & Paykel Healthcare gained 2c to 308, TrustPower was up 1c to 758, Ryman Healthcare was up 2c at 193 and Steel & Tube was up 5c at 310.

Fletcher Building fell 1c to 811, Contact fell 8c to 610 and Telecom fell 3c to 250.

Also falling were Fisher & Paykel Appliances down 2c to 64, Auckland Airport 5c to 192 and Pike River Coal 1c to 111.

Westpac, which announced it will appeal the tax ruling on structured finance transactions, fell 69c to 3190.

In the US, stocks pushed mostly back into positive territory, but were off session highs, as a sell-off in banking shares reversed initial gains built on solid economic data.

Key data on manufacturing and housing pointed to steady improvement in the economy, but critical comments on the financial sector from a Federal Reserve official caused investors to sell financial shares.

The Dow Jones industrial average gained 0.5 per cent to 9757.47, the Standard & Poor's 500 Index gained 0.2 per cent to 1038.65, and the Nasdaq Composite Index dropped 0.2 per cent to 2041.65.

- NZPA