NZ stocks: Market dips on the back of US economic news

The sharemarket eased throughout today's session on the back of US Federal Reserve chairman Alan Greenspan giving a cautiously optimistic view of that country's economy.

The benchmark NZSX50 gross index finished down 27.56 points, or 1.29 per cent, at 2104.28, while the NZSX40 capital index was down 25.09 points, or 1.21 per cent, at 2047.84.

Both indices lost ground from market's open at 10am.

In trading today, the market saw $109.5 million worth of shares traded on turnover of 39.5 million. Among the 134 stocks traded were 40 rises and 54 falls.

Shares in market gorilla Telecom slipped 13c to 495, having traded $48.9 million worth on volume of 9.8 million.

ABN Amro Craigs broker Matt Willis said although the market had got off to a slow start it had finished on good volume.

"I think it was because the market was digesting what happened in the US overnight," Mr Willis said.

"Greenspan's comments certainly fuelled a big sell-off in the bond market there.

"I think perhaps our market moved in anticipation that you're going to see rising interest rates. Therefore in a yield market such as ours it's an incentive to protect profits and sell.

"It's a bit of a catch 22, really, because you had Greenspan indicating rates could go down as low as 25 basis points, but his comments were reasonably bullish for short to medium term growth," Mr Willis said.

"I think that is what was negative for our market, as ironic as it may seem."

Other brokers said the ease in trading could be pinned to the lack of corporate information in the lead-up to the June quarter reporting season.

However, Carter Holt Harvey (CHH) announced a half-year profit of $92 million, but said the Kinleith industrial dispute had affected its earnings.

By market's close, CHH's shares had slipped 2c to 163.

Shares on the rise included: DB Breweries up 5c to 680, Fletcher Building up 7c to 372, Lion Nathan up 10c to 615, NZX up 5c to 490, Sky City Leisure up 5c to 125, and TrustPower up 10c to 495.

On the slide were: AMP down 17c to 563, Contact Energy down 8c to 464, Fletcher Challenge Forests down 3c to 115, Fisher & Paykel Appliances down 12c to 1285, Sky City down 12c to 888, and Westpac down 15c to 1700.

Overseas, the Dow Jones index shed 48.18 points to 9128.97. The broad Standard & Poor's 500 slipped 3.44 points to 1000.42. The Nasdaq Composite fell 1.54 points to 1753.28.

- NZPA