NZ Stocks: Energy stocks grab limelight on flat market

Energy stocks stole the limelight on a flat New Zealand sharemarket today, as investors got spooked by the spectre of state intervention in the electricity sector.

Offshore, the Dow Jones ended up 0.8 per cent and the FTSE-100 gained 0.5 per cent on reassurances that the US-led forces were making progress in getting to Baghdad.

But in New Zealand, the indices barely got out of bed. The benchmark NZ50 gross index closed up 2.75 points to 1908.16 on moderate turnover of $59.5 million. The NZSE-40 capital index hardly budged, up 0.05 points to 1877.99.

"There were pockets of the market that were trading and then other pockets that were extremely quiet, and I guess that's a function of the uncertainty around the world at the moment," First NZ Capital broker James Snell observed.

Some energy stocks took a beating as uncertainty took hold about possible Government moves to secure the power supply.

With fears of electricity shortages this winter getting sharper, Energy Minister Pete Hodgson said yesterday that the Government was looking at several options including a single body to buy and sell all generated electricity.

Investors who have been banking on generating companies reaping high spot prices this winter took flight. The biggest listed power company, Contact Energy, closed down 14c to 431, off a year high of $4.62 in mid-February.

But Forsyth Barr Frater Williams analyst Rob Mercer said Contact's value was more long-term and he was doubtful the Government could successfully cap power prices and encourage further investment.

"The long-term value driver for Contact is an equilibrium price for electricity at slightly higher levels than they currently are at the moment...unless you get pricing at the level that justifies investment, you're not going to get it."

Other energy stocks were also hit. Hydro power generator Trustpower ended down 10c to 390, and Whakatane-based lines company Horizon Energy plunged 30c to 270 but on thin trading.

Top performing company Designer Textiles was flat at 95c following yesterday's announcement that its chairman, George Gould, had become chairman of Vertex. Vertex jumped 3c to 146.

Market leader Telecom ended flat at 433 on $12.6 million worth of shares. Defensive stock Kiwi Income Property Trust nosed up a cent to 106 on a turnover-topping 3.1 million shares.

Australian financial companies appeared to benefit from a 1 per cent slide on the New Zealand dollar versus the Australian. Westpac climbed 44c to 1525, ANZ was up 85c to 1925 and AMP gained 35c to 820 on the back of a more positive British market.

Other gainers included Telstra up 6c to 438, Guinness Peat Group gained 4c to 153, Briscoe Group was up 3c to 189, and Auckland Airport was up 5c to 520.

On the downside, Sky City fell 3c to 790, Pacific Retail lost 8c to 212, and Michael Hill down 7c to 430. Air New Zealand lost 2c to 50 as Wellington Airport said it was seeking $7 million from the airline in raised aeronautical fees.

Rises outnumbered falls 40 to 34 on 128 stocks traded.

On Wall St, the blue-chip Dow Jones industrials ended up 65.55 points, or 0.80 per cent, at 8280.23, after jumping almost 1.5 per cent earlier. The tech-laced Nasdaq Composite was up 21.23 points, or 1.55 per cent, at 1391.01, after an earlier rise of more than 2.2 per cent. The broad Standard and Poor's 500 added 10.51 points, or 1.22 per cent, to 874.74.

The FTSE-100 ended up 18.7 points, or 0.5 per cent, at 3,762.

- NZPA