NZ stocks: Air NZ shares rise on flat market

12.10 pm

WELLINGTON - The New Zealand sharemarket was drifting without much direction today, although Air New Zealand shares continued to strengthen.

In mid-morning trade the NZSE-40 capital index was down 2.52 points this morning to 1841.42. Turnover climbed to a sluggish 11.9 million shares worth $25.2 million, and brokers noted that many shares were unchanged.

Air NZ was still in the spotlight -- at 11am Air NZ A shares had risen 3c to 37 and B shares were up 5c to 35.

One broker said the buying was being fuelled by private clients who were picking up Air NZ because they were cheap, but that they were operating in the dark.

"Seasoned investors would not be buying a stock which is so difficult to value and potentially have a large recapitalisation just around the corner," said Bryon Burke of ABN Amro Craigs Equities.

Baycorp topped the turnover by value with $5.4 million worth of shares changing hands. It was rose 9c soon afterwards to 1019.

Market leader Telecom eased 7c to 454, partly in reflection to its price on Wall Street last night. Yesterday United States-based telco Bell Atlantic Holdings Ltd, a unit of Verizon Communications, announced it had reduced its cornerstone shareholding in Telecom from 24.95 to 22.5 per cent.

Others stocks were having a mixed morning -- stocks to fall included Fisher and Paykel down 3c to 1180; Contact Energy up 1c to 340; Tower down 8c to 462; Sky TV down 4c to 320; and NZ Refining Company down 10c to 1510.

Stocks to rise included the Warehouse up 2c to 592; Bendon up 1c to 169; Sky City up 6c to 1066; Port of Tauranga up 20c to 700; and Auckland Airport up 3c to 330.

Rises outnumbered falls by 44 rises to 28 on 108 stocks traded.

On Wall Street overnight, US stocks fell on renewed signs of corporate malaise, compounding existing fears about the economic impact of US-led military action in Afghanistan.

The blue-chip Dow Jones industrial average closed down 92.58 points, or 1.07 per cent, at 8,567.39. The technology-packed Nasdaq Composite Index fell 37.60 points, or 2.50 per cent, to 1464.04. The broader Standard and Poor's 500 Index was down 5.23 points, or 0.52 per cent, at 1007.04.

- NZPA