NZ stocks: INL stars, but majors drag market down

The Top 40 share index peeked over the 2000 mark, but slipped below that level by the close.

Sizeable falls in Telecom, Contact, The Warehouse and Fisher & Paykel dragged the market down.

The NZSE-40 index finished down 0.7 per cent, or 13.78 points at 1994.89. The top 10 index closed down 12.25 points to 884.14, but the small stocks index gained 16.52 points to 5572.32.

Turnover was good at $90.9 million.

News that the US Federal Reserve had cut rates to a 40 year low of 2 per cent and that a further cut was likely was welcomed with a strong rise on Wall Street.

But it did not inspire the local market despite it improving the chances of a similar half percentage point cut here next Wednesday.

Brokers said the local market was artificially boosted in late trade on Tuesday by a portfolio purchase.

Standout performer yesterday was INL, which gained 17c to $3.77. A parcel of 4 million INL shares was crossed at the close by broker JP Morgan and overall turnover in the publisher was worth $17.6 million.

JBWere broker Murray Rutherford said INL was getting belated recognition for the strong run of Sky TV which has gone from $3.39 to $3.70 (up 5c yesterday) in a couple of weeks.

On Tuesday, INL, which owns two-thirds of Sky, told shareholders that the break-even target for Sky had been pushed forward and a strengthening currency would bring it further forward. INL also said its ad revenue in the first 17 months was ahead of last year's.

Fisher & Paykel fell 55c to $14.40. Mr Rutherford said there was no particular reason why this year's market darling should be sold other than profit taking before the company split.

Contact fell 7c to $4.10. Mr Rutherford said it was not cheap enough to encourage the buyers.

While Edison Mission had signalled its determination to win the stock, institutions had indicated they wouldn't quit easily, he said.

The Warehouse fell 12c to $6.68 after announcing its same store sales for the October quarter were up 1.9 per cent. It said its sales in the first quarter were affected by the September 11 attacks in the United States but had now largely returned to normal.

Mr Rutherford said that on first glance the sales report was not good, but below the surface, particularly in Australia, the picture was better.

Telecom finished down 7c at $4.66 and well off its session high of $4.78. Again, profit taking was blamed.

More than 12 million Affco shares with a value of $3.5 million were traded before the market opened as part of a share placement in which Talley's Group will take an 11.3 per cent stake in the company. Affco closed 1c up at 31c.

Fellow meat company Richmond closed down 4c at $2.76 after announcing a record year profit. The net profit of $20.65 million was slightly better than the prospectus forecast, but the pre-tax profit was slightly below forecast. The company indicated it would pay higher dividends.

Natural Gas closed square at $1.27 after falling 2c to $1.25 in early business. On Tuesday the Government announced a possible shake-up of the gas transmission industry.

Carter Holt Harvey fell 3c to $1.44.

* The New Zealand dollar ended flat yesterday after being bumped up by merger and acquisition rumours overnight.

At 5pm, the kiwi was at 41.96USc, up on Tuesday's 41.75c close, but below its 42.06c opening level.

The Australian dollar was equally moribund at 51.41USc, despite a decision by the Reserve Bank of Australia to hold fire on rates days before the federal election.

Dealers said the Australasian currencies were bid up on merger rumours surrounding Australian banks, but that sentiment did not continue throughout the day.

- NZPA