Market dips over 1pc on offshore weakness

The New Zealand sharemarket dipped today on a combination of profit-taking and weakness in offshore markets.

But news that a huge rights issue by Pyne Gould Corp only had a shortfall of 11.3 per cent was well received as evidence of the market's ability to provide capital.

The benchmark NZSX-50 index closed down 34.34 points, or 1.056 per cent, at 3218.221. Turnover was worth $92.42 million. There were 26 rises and 63 falls among the 122 stocks traded.

"A bit of offshore weakness overnight has brought prices back a bit," said Grant Williamson, director at Hamilton, Hindin, Greene said.

Fletcher Building, after having a good day yesterday, fell 5c to 840.

Pyne Gould shares were unchanged at 46c after the company announced the takeup of its fully underwritten $237m rights issue.

"The shortfall was better than what most people were expecting so it was quite a successful capital raising," said Mr Williamson.

He does not expect much so-called overhang in the stock.

"The underwriters probably won't be in any hurry to sell and there is a bookbuild now for the stock," he said.

The company will hold a bookbuild for an institutional placement to raise a further $15m to $30m this week.

Pike River Coal rose 3c to 116 even though it signalled it needs more money for working capital before its first shipment in the first quarter of next year.

PGG Wrightson fell 3 to 70. There has been negative press coverage about the company's new cornerstone shareholder and investors are waiting for details of a capital raising.

Port of Tauranga fell 6c to 725 ahead of its annual meeting tomorrow.

TrustPower fell 3c to 757 and Contact Energy fell 8c to 627.

Telecom fell 2c to 255.

SkyTV fell 18c to 472 and SkyCity fell 9c to 346.

"I think profit-taking has got the better of SkyCity today but in the last week or so it has moved up very nicely," Mr Williamson said.

Infratil fell 6c to 162. Hallenstein Glasson fell 5c to 305 and AirNZ fell 2c to 130.

Freightways fell 8c to 310 and Mainfreight fell 10c to 555.

Fisher & Paykel Healthcare was down 2c to 297.

In the United States, stocks retreated from 12-month highs as disappointing housing and inflation data prompted investors to book recent gains despite strong results from bellwethers including Apple and Caterpillar.

New construction of US homes rose less than expected in September and US producer prices posted an unexpected decline, both pointing to an anaemic economic recovery.

The Dow Jones industrial average ended down 0.5 per cent at 10,041.48, the Standard & Poor's 500 Index fell 0.6 per cent to 1091.06, and the Nasdaq Composite Index shed 0.6 per cent to 2163.47.

- NZPA