NZ stocks: Market echoes Telecom weakness after telco's result

Telecom's weakness and an unexpected rate rise in Australia dampened the New Zealand market today.

The benchmark NZSX-50 gross index closed down 4.22 points, or 0.18 per cent, at 2321.60 and the top-40 index was down 0.16 per cent at 2220.63.

Topping turnover was Telecom's $36.2 million, followed by Fletcher Building's $10.0 million.

Suzanne Kinnaird of Forsyth Barr said the market had a mixed day, with Telecom falling 5c to 490 despite posting a better than expected $162 million first quarter profit today.

"It's disappointing to see them down... it was ahead of our expectations and ahead of market expectations. I thought the result looked pretty sound, and nothing for the market to be upset about," she said.

The Reserve Bank of Australia (RBA) today raised the official cash rate by 25 basis points to 5.00 per cent, its first shift in monetary policy for 17 months.

"Possibly it's simply the RBA raising rates and seeing a bit of coming off in the Aussie market, maybe that's set on into Telecom."

Fisher & Paykel Appliances rose 18c to 1518 after announcing a four for one split in its stock, effective next Friday.

"Technically it creates no value, but it does mean that the shares are now traded at a lot lower price and that means liquidity will increase. Investors in New Zealand tend to like to buy shares that are cheaper in value for some reason," Ms Kinnaird said.

Fletcher Building fell 8c to 430.

"I would suspect that that may be on the back of the fact they've got a large stake in Australia, so that rate rise earlier than it was expected by the RBA has come through."

While a rate rise meant the economy was more robust, it would also make borrowing more expensive which was likely to dampen the construction sector.

Independent Newspapers Ltd and its takeover target Sky TV both rose to their highest levels, up 11c to 492 and up 4c to 525 respectively.

Fish exporter Sanford was unchanged at 540 after releasing details of its dividend payouts and predictions of a 20 per cent rise in annual profit.

Auckland Airport was up 5c at 666, Tranz Rail rose 1c to 130, Fletcher Forests was up 1c at 133, Contact Energy gained 3c to 508, and F&P Healthcare was up 15c at 1210.

Infratil rose 4c to 254, Restaurant Brands was up 1c at 134, Wrightson Group gained 1c to 149, Hellaby Holdings was up 9c at 469, Cavalier lifted 11c to 556, and Baycorp Advantage was up 2c at 307.

The Warehouse was down 3c at 570, ANZ lost 48c to 1972, Westpac was down 30c at 1715, Tower lost 2c to 129, Sky City was down 5c at 895, Steel & Tube shed 6c to 389, and Telstra lost 3c to 542.

Turnover of 34.5 million stocks was valued at $95.24 million. There were 54 rises and 49 falls on the 149 stocks traded.

- NZPA