NZ stocks: Investors shrug off rate drop

The sharemarket was treading water yesterday, giving no indication it noticed the Reserve Bank had cut interest rates by 25 points.

The NZSE-40 capital index closed down 6.39 points, or 0.31 per cent, at 2073.32, although the NZSE-SCI capital index gained 28.71 points to 5232.72.

Turnover was light - 26.99 million shares valued at $68.46 million, topped by Telecom's $17.11 million.

"It was a bit disappointing following interest rate cuts both here and in the US," Alan Wills of Forsyth Barr Frater Williams said.

The mild cut in New Zealand - the third this year - contrasted with much more aggressive action by US Federal Reserve chairman Alan Greenspan.

"The main culprit of the day was Telecom," Mr Wills said.

"It lost ground throughout the day to close on its low of $5.93, down 13c. That was down 2 per cent, easily the bulk of the market losses."

There was no specific news yesterday to push the telco down.

"There seemed to be one or two more persistent sellers, but there was no reason for it - I think the market is still just assessing that third quarter result," Mr Wills said.

Contact Energy was down 1c at $2.95 after releasing an appraisal report by Grant Samuels before cornerstone shareholder Edison Mission Energy's bid to lift its stake beyond 50 per cent.

The report said the offer by Edison subsidiary Edison Pacific Holdings for 49 million shares at between $2.90 and $3.25 each was fair.

Fisher and Paykel appeared to fall foul of some profit taking, falling 8c to $9.35 after a spectacular rise in recent weeks.

Lion Nathan was down 2c at $5.00 before its entry into the market today for a further 5 per cent stake in Montana, which closed up 11c at $4.81.

The appointment of a new chief executive to Fletcher Building sparked renewed interest in the stock, and it was up 2c to $2.29 in contrast to Forests which shed 1c to 32c.

Former Email managing director Ralph Waters will take control in June when interim chief executive Michael Andrews steps down.

Sky TV lost 4c to $3.72, Port of Tauranga was down 5c at $6.25 and Auckland Airport dropped 2c to $3.53.

The Warehouse gained 6c to $5.61, and ANZ Bank jumped 46c to $18.51 after the kiwi dollar weakened against the aussie.

Cavalier was up 5c at $5.20, DB Group jumped 14c to $5.40 and Nuplex rose 7c to 350.

Meat exporter Richmond was up 9c at $2.40 after announcing that it plans to spend $6.5 million on upgrading and expanding the boning room facilities at one of its major beef processing plants, Richmond Pacific in Hastings.

- NZPA