NZ stocks: Market eases in sympathy with USA

12.00 pm

The sharemarket eased this morning in line with a fall on Wall Street which is jittery about upcoming data this week.

Just after 11am the NZSE-40 capital index was 10.73 points down to 1948.31 on reasonable turnover worth $35.1 million.

Nearly half the turnover led back to market leader Telecom, most of which -- 3 million shares -- traded pre-market in several lots.

Brokers would not speculate on the volume at this stage, but Wall Street-listed Telecom dropped 8c to 453. One possible reason was the drop on the Dow which fell 251.38 points, or 2.6 per cent, to 9293.79, amid concerns the continuing war in Afghanistan might delay a rebound in corporate profits.

Andrew Kelleher, intermediary broking manager at ASB Securities, said it was likely to be a "difficult week" for equity markets and New Zealand would probably follow suit.

"The main news today is simply that after a good run we're seeing a bit of profit-taking on the back of the Dow drifting off," he said.

"This week we have a very big data week in the US with the NAPM (manufacturers' figures), the Q3 GDP figures and the payroll figures...Commentators are starting to question why the Dow has rallied as far as it has.

"Prior to September 11, the US had issues and we now may see some evidence that they are going to be exacerbated by the events of September 11."

Elsewhere on the New Zealand market, takeover target Frucor Beverages eased 5c to 240, indicating some shareholders felt the stock had reached a ceiling yesterday when it reached new highs of 247.

Contact Energy, also under offer, drifted back 2c to 414.

Other stocks to slip included market darling Fisher & Paykel, down 15c to 1450; Telstra down 5c to 600; and the Warehouse, which has been a success story over the last couple of weeks, was down 3c to 628.

Waste Management initially rallied but shed 2c to 260 in late morning trading. The firm said yesterday it expected to return to double-digit annual earnings growth after the current financial year. Last month it warned that it expected to post a reduced net profit of about $13 million for the current year, down from $19 million forecast earlier.

"Waste Management seemed to have turned the corner...after a period when it had no friends at all," said Mr Kelleher. "Technical junkies will like the fact it has bounced off a low of 235 and done it on reasonable volume."

Sky City was back 5c to 1211 and Natural Gas Corp was steady at 124, ahead of their annual meetings today.

On the upside, Air NZ A and B shares were both up 1c to 30.

Falls outnumbered the rises by 38 to 21 on 109 stocks traded so far.

In New York, major companies General Electric Co and Microsoft Corp helped drive the Standard & Poor's 500 Index to its biggest loss in more than a month.

The S&P 500 fell 24.37, or 2.2 per cent, to 1080.24 as financial and software shares declined. All 11 broad industry groups were lower.

The Nasdaq Composite Index lost 62.78, or 3.6 per cent, to 1706.18.

- NZPA